EGBERT,
J.:—The
executors
and
trustees
of
the
will
of
Frank
Robertson
Webster,
deceased,
apply
under
The
Trustees
Act,
R.S.A.
1942,
ch.
215,
for
the
advice
and
discretion
of
the
court
on
the
following
questions
:
(1)
What
part
of
the
income
received
by
the
trustees
from
investments
unauthorized
by
The
Trustee
Act
is
to
be
deemed
income
payable
to
the
liferentrix
and
what
part
is
to
be
retained
by
the
trustees
as
capital
ultimately
payable
to
the
remaindermen?
And
from
what
date
is
interest
to
the
liferentrix
to
be
calculated
?
(2)
How
much,
if
any,
of
the
debts
of
the
deceased
and
of
the
costs
of
administration,
succession
duties,
annuities
and
legacies
are
to
be
paid
out
of
revenue
and
how
much
out
of
capital
?
(3)
To
what
extent
is
the
discretion
of
the
trustees’
power
to
postpone
limited,
if
at
all,
as
to
length
of
time?
In
Perrin
v.
Morgan,
[1943]
A.C.
399,
112
L.J.
Ch.
81,
[1943]
1
All
E.R.
187,
the
House
of
Lords
had
occasion
to
interpret
the
meaning
of
the
word
‘‘money’’
as
used
in
a
will.
In
the
course
of
his
judgment
Viscount
Simon,
L.C.,
said:
‘The
fundamental
rule
in
construing
the
language
of
a
will
is
to
put
upon
the
words
used
the
meaning
which,
having
regard
to
the
terms
of
the
will,
the
testator
intended.
The
question
is
not,
of
course,
what
the
testator
meant
to
do
when
he
made
his
will,
but
what
the
written
words
he
uses
mean
in
the
particular
case-~-what
are
the
‘expressed
intentions’
of
the
testator.
.
.
.
"'The
duty
of
the
Court
.
.
.
is
to
ascertain
without
prejudice
as
between
various
usual
meanings
which
is
the
correct
interpretation
of
the
particular
document.
.
.
.
té
the
duty
of
a
judge
who
is
called
upon
to
interpret
a
will
containing
ordinary
Enelish
words
is
not
to
regard
previous
decisions
as
constituting
a
sort
of
legal
dictionary
to
be
consulted
and
remorselessly
applied,
whatever
the
testator
may
have
intended,
but
to
construe
the
particular
document
so
as
to
arrive
at
the
testator’s
real
meaning,
according
to
its
actual
language
and
circumstances
.
.
.
‘“The
present
question
is
not,
in
my
opinion,
one
in
which
the
House
is
required,
on
the
ground
of
public
interest,
to
maintain
a
rule
which
has
been
constantly
applied
but
which
it
is
convinced
is
erroneous.
It
is
far
more
important
to
promote
the
correct
construction
of
future
wills
in
this
respect
than
to
preserve
consistency
in
misinterpretation.’’
Lord
Atkin
said:
"The
result
of
your
Lordship’s
decision
will
be
to
relieve
judges
in
the
future
from
the
thraldom,
often
I
think
selfimposed,
of
judgments
in
other
cases
believed
to
constrain
them
to
give
a
meaning
to
a
will,
which
they
know
to
be
contrary
to
the
testator’s
intention.”
And
Lord
Romer
stated
:
"If
.
.
.
the
Court
has
felt
itself
prevented
by
some
rule
of
construction
from
giving
effect
to
what
the
language
of
the
will,
read
in
the
light
of
the
surrounding
circumstances,
convinces
it
was
the
real
intention
of
the
testator,
it
has
misconstrued
the
will.’’
With
all
respect,
I
think
that
the
principles
enunciated
by
their
Lordships
are
the
principles
which
should
guide
any
court
in
construing
a
will
and
they
are
the
principles
upon
which
I
approach
the
problems
now
presented.
The
testator,
Frank
Robertson
Webster,
died
at
Calgary,
on
February
19,
1948.
By
his
will
dated
February
19,
1947,
he
appointed
Arthur
D.
Davis,
Margaret
Davis
and
Henry
Darney
Mann
(hereinafter
referred
to
as
"the
trustees’’)
the
executors
and
trustees
of
his
will
and
devised
and
bequeathed
to
the
trustees
all
his
property
upon
certain
trusts.
The
relevant
portions
of
the
will
are
as
follows
:
"(1)
I
Direct
my
trustees
to
realise
my
estate
and
convert
same
into
cash
as
soon
as
may
be
convenient
provided,
however,
that
I
give
my
trustees
full
power
to
postpone
such
realization
and
conversion
until
my
trustees
may
in
their
absolute
discretion
deem
the
time
favourable
and
opportune
and
provided
further
that
no
part
of
my
estate
shall
be
realized
or
converted
without
the
consent
of
all
my
trustees
for
the
time
being
if
more
than
one
is
acting.
And
I
further
give
my
trustees
full
power
pending
such
realization
and
conversion
to
carry
on
any
business
or
businesses
in
which
I
may
have
been
engaged
at
the
time
of
my
death.
‘(2)
I
Direct
my
trustees
first
out
of
my
estate
to
pay
my
just
and
lawful
debts,
funeral
and
testamentary
expenses
»
>
Provision
is
then
made
by
clauses
3
to
8
inclusive
for
the
payment
or
the
purchase
of
certain
annuities
for
the
benefit
of
named
beneficiaries.
Then
follows
a
clause
relating
to
certain
shares,
which
reads
as
follows
:
‘(9)
For
the
sake
of
clarity
and
for
the
purpose
of
giving
my
trustees
specific
authority
in
connection
with
my
share
holdings
in
the
Royal
Hotel
Company
Limited
operating
the
Royal
Hotel
in
Calgary
I
hereby
authorize
and
direct
my
said
trustees,
if
in
their
absolute
discretion
and
opinion
it
appears
necessary,
to
set
aside
from
my
estate
before
payment
to
any
beneficiary
a
capital
sum
sufficient
to
acquire
the
proportionate
share
to
which
I
may
be
entitled
in
any
other
shareholdings
of
the
said
Royal
Hotel
which
may
be
offered
for
sale
by
any
other
shareholder
in
said
Royal
Hotel
Company
Limited,
this
direction
and
authority
to
be
exercised
by
my
trustees
so
long
as
my
holdings
in
said
Royal
Hotel
Company
Limited
do
not
comprise
a
majority
of
the
authorized
shares
in
said
Hotel
Company.
I
direct
the
attention
of
my
trustees
to
the
Pooling
Agreement
held
by
The
Trusts
and
Guarantee
Company
Limited
affecting
shares
in
the
said
The
Royal
Hotel
Company
Limited.
‘“And
I
authorize
and
direct
my
trustees
to
acquire
any
such
further
shares
in
the
Royal
Hotel
Company
Limited
as
may
be
from
time
to
time
or
at
any
time
offered
for
sale
by
any
other
shareholder
of
said
Royal
Hotel
Company
Limited.
"‘This
paragraph
however
is
not
to
be
construed
as
in
any
way
restricting
my
trustees
in
the
sale
of
any
part
of
my
estate
or
as
restricting
their
right
and
authority
to
sell
my
holdings
in
the
said
Hotel
Company.”
Then
follows
a
gift
of
income
from
the
residue
of
the
estate
in
the
following
words:
"
*
(10)
After
provision
has
been
made
for
carrying
the
foregoing
directions
into
effect
I
direct
my
trustees
to
pay
the
entire
income
from
the
residue
of
my
estate
to
my
daughter
Margaret,
the
said
Mrs.
Arthur
D.
Davis,
so
long
as
she
lives.’’
Provision
is
made
(which
need
not
be
quoted)
for
the
disposition
of
the
income
in
the
event
of
the
liferentrix
dying
before
her
youngest
daughter
attains
the
age
of
21.
Clause
11
then
provides
for
the
disposition
of
the
estate
upon
the
death
of
the
liferentrix;
only
the
first
part
of
the
clause
need
be
quoted.
"(11)
Upon
the
death
of
my
daughter
Margaret
and
upon
her
youngest
surviving
child
attaining
the
full
age
of
twenty-
one
years
I
direct
my
trustees
to
divide
one
half
of
the
residue
of
my
estate
both
capital
and
income
between
Arthur
D.
Davis
and
each
of
the
children
of
my
daughter
Margaret
in
equal
shares
and
to
pay
his
share
in
full
to
the
said
Arthur
D.
Davis
forthwith
thereafter
and
to
pay
the
capital
of
their
shares
to
the
children
of
my
daughter
Margaret
as
each
severally
attains
the
age
of
thirty
years
the
income
therefrom
to
be
paid
to
said
children
in
the
meantime
from
the
time
the
youngest
child
reaches
the
age
of
twenty-one
years.’’
The
clause
goes
on
to
provide
for
certain
contingencies
arising
upon
the
death
or
deaths
of
the
various
beneficiaries
and
to
provide
for
a
similar
disposition
(at
a
different
time)
of
the
other
half
of
the
residue.
Clauses
12
and
13
also
provide
for
contingencies
arising
upon
the
death
of
the
beneficiaries.
Clause
14
is
quoted
in
full
:
"14.
I
Direct
that
my
estate
shall
pay
all
and
any
succession
duties
which
may
be
payable
in
respect
of
the
benefits
received
by
any
beneficiary
or
beneficiaries
under
this
mv
Will.”
The
will
concludes
with
clauses
15
and
16
which
are
purely
administrative
provisions
relating
to
the
release
and
compounding
of
debts,
and
the
substitution
of
trustees.
All
the
debts
of
the
testator
and
all
funeral
and
testamentary
expenses
have
been
paid.
All
legacies
and
annuities
have
been
paid
and
provided
for.
All
the
assets
of
the
estate
have
been
sold
and
converted
with
the
exception
of
the
following
shares
which
were
held
by
the
testator
at
the
time
of
his
death:
(1)
2,400
ordinary
shares
of
Sicks’
Breweries
Limited
valued
for
succession
duties
at
$15.25
per
share
or
$33,600
(the
market
quotation
at
the
time
of
the
application
being
approximately
$22
per
share)
;
(2)
6,563
shares
of
Royal
Hotel
Company
Limited,
valued
for
succession
duty
purposes
at
$131,631.81.
In
addition
to
these
shares
the
trustees
now
hold
an
additional
3,280
shares
of
Royal
Hotel
Company
Limited
which
they
purported
to
purchase
pursuant
to
their
discretionary
power,
contained
in
the
will,
relating
to
these
shares.
On
the
same
basis
of
valuation
as
applied
to
the
other
Royal
Hotel
shares,
these
3,280
shares
have
a
value
of
$65,799.97.
There
are
issued
17,500
shares
of
Royal
Hotel
Company
Limited
of
which
the
estate
now
holds
9,843.
It
is
common
ground
that
the
Sicks’
Breweries
shares
and
the
Royal
Hotel
shares
are
not
trust
investments
authorized
by
the
provisions
of
The
Trustee
Act.
The
answer
to
the
first
and
main
question
depends
upon
whether
the
rule
in
Howe
v.
Dartmouth
(Earl)
(1802),
7
Ves.
Jun.
137,
32
E.R.
56
(or
any
of
its
corollaries)
does
or
does
not
apply
to
this
will.
Stated
baldly,
without
taking
into
account
any
of
the
numerous
exceptions
to
it,
the
rule
in
Howe
v.
Dartmouth
(Karl)
is
this
:
Where
residuary
personalty
is
settled
on
death
for
the
benefit
of
persons
who
are
to
enjoy
it
in
succession,
the
duty
of
the
executor
is
to
convert
all
such
parts
of
it
as
are
of
a
wasting
or
future
or
reversionary
nature,
or
consist
of
unauthorized
securities,
into
property
of
a
permanent
and
income-bearing
character.
The
courts
for
150
years
have
endeavoured
to
insist
that
this
is
not
an
artificial
rule
of
construction,
but
a
rule
designed,
in
the
absence
of
any
expression
of
contrary
intention
by
the
testator,
to
give
effect
to
his
presumed
intention
and
to
deal
equitably
between
the
tenant
for
life
and
the
remaindermen.
As
North,
J.,
says
in
I
92
re
Pitcairn;
Brandreth
v.
Colvin,
[1896]
2
Ch.
199,
65
L.J.
Ch.
1201,
the
court
does
not
arbitrarily
put
an
intention
into
the
testator’s
mouth
contrary
to
his
expressed
intention.
It
merely
lays
down
a
rule
which
is
to
be
applied
if
no
intention
is
to
be
gathered
from
the
will
as
a
whole.
It
then
supplies
such
presumed
intention
:
‘©
“But
if
the
intention
of
the
testator
appears
to
be
that
the
first
taker
shall
enjoy
the
property
in
that
state
in
which
it
exists
at
his
death,
the
Court
is
bound
to
give
effect
to
that
intention.’
‘*,..
the
question
is,
what
was
the
testator’s
intention,
and
that
intention
must
be
gathered
from
his
will.’’
Kekewich,
J.,
says
in
In
re
Bates;
Hodson
v.
Bates,
[1907]
1
Ch.
22,
76
L.J.
Ch.
29
:
4
\
.
.
.
it
is
a
question
of
intention
and
the
rule
in
Howe
v.
Dartmouth
(Karl)
is
founded
on
what
is
presumed
to
be
the
intention
of
the
testator
where
personal
estate
is
given
to
one
for
life
and
afterwards
to
others.
.
.
.
When
once
you
have
arrived
at
the
intention
of
the
testator,
you
must
give
effect
to
it
notwithstanding
the
rule
in
Howe
v.
Dartmouth
{Earl}
y
In
In
re
Parry;
Brown
v.
Parry,
[1947]
1
Ch.
23,
[1947]
L.J.R.
81,
Romer,
J.,
said
that
the
rule
is
a
matter
of
general
convenience,
that
what
is
done
by
the
application
of
the
rule
is
done
for
the
advantage
of
all
persons
concerned
having
regard
to
what
is
practicable.
It
is
practicability
which
fixes
the
notional
conversion,
when
there
was
no
power
of
postponement,
as
occurring
after
the
lapse
of
one
year
from
the
testator’s
death,
which
the
court
regards
as
a
reasonable
or
practical
period
and
he
sums
up
the
authorities,
which
he
reviews,
in
the
following
words:
“Where
residuary
property
was
settled
by
will
.
.
.
Where
there
was
no
trust
for
sale
the
same
point
of
time
was
selected
by
parity
of
reasoning.’’
He
goes
on
to
say
that
where
there
is
an
express
or
implied
power
of
postponement
of
conversion
he
can
see
no
reason
for
assuming
a
notional
conversion.
"‘It
is
accordingly
rational
and
indeed
obvious
to
substitute
a
valuation
of
the
testator’s
assets
in
place
of
a
hypothetical
sale
and
if
so
it
is
difficult
to
think
of
a
better
date
for
the
valuation
than
the
day
when
the
testator
died
and
the
assets
passed
to
his
executors
:
’
’
Brown
v.
Gellatly,
infra.
Whether
the
rule
is
an
‘‘arbitrary’’
or
a
"beneficial”
one,
it
does
seem
to
me,
with
all
deference,
that
in
some
cases,
as
must
be
inevitable
when
it
is
sought
to
apply
rules
of
construction
of
this
nature,
the
courts
have
succeeded
in
defeating
rather
than
in
giving
effect
to
the
intention
of
the
testator.
Examples
of
cases
in
which
the
rule,
or
its
alter
ego,
the
rule
in
Dimes
v.
Scott
(1827),
4
Russ.
195,
38
E.R.
778,
or
its
corollaries,
the
rule
in
In
re
Earl
of
Chesterfield’s
Trusts
(1883),
24
Ch.
D.
643,
92
L.J.
Ch.
958,
or
the
rule
in
Allhusen
v.
Whitt
ell
(1867),
L.R.
4
Eq.
295,
36
L.J.
Ch.
929,
have
been
applied
are:
Brown
v.
Gellatly
(1867),
L.R.
2
Ch.
751,
17
L.T.
131
;
In
re
Morley
;
Morley
v.
Haig,
[1895]
2
Ch.
738,
64
L.J.
Ch.
727;
In
re
Game;
Game
v.
Young,
[1897]
1
Ch.
881,
66
L.J.
Ch.
505;
Wentworth
v.
Went^
worth,
[1900]
A.C.
163,
69
L.J.P.C.
13;
Rowlls
v.
Bebb,
[1900]
2
Ch.
107,
69
L.J.
Ch.
562
;
In
re
Evans’
Will
Trusts;
Pickering
v.
Evans,
[1921]
2
Ch.
309,
91
L.J.
Ch.
29
;
In
re
Trollope’s
Will
Trusts,
[1927]
1
Ch.
596,
96
L.J.
Ch.
340;
In
re
Fawcett;
Public
Trustee
v.
Dugdale,
[1940]
1
Ch.
402,
109
L.J.
Ch.
124;
In
re
Hey
9
s
Settlement
Trusts;
Hey
v.
Nickell-Lean,
[1945]
Ch.
294,
114
L.J.
Ch.
278,
[1945]
1
All
E.R.
618;
In
re
Parry;
Brown
v.
Parry,
supra;
ke
Kirkland
(1916),
37
O.L.R.
569;
Re
Bingham
(1930),
66
O.L.R.
121
;
In
re
Mitchell
Estate;
National
Trust
Co.
v.
Carson,
[1936]
3
W.W.R.
249;
In
re
Lennox
Estate
(No.
3),
[1948]
2
W.W.R.
640,
57
Man.
R.
261,
affirmed
[1949]
S.C.R.
446
;
and
while
none
of
these
judgments
is
open
to
criticism
if
the
court’s
task
is
merely
to
apply
an
inflexible
rule
of
construction
which
was
formulated
150
years
ago,
I
repeat,
with
deference,
that
if
some
of
these
judgments
are
examined
closely
it
must
be
apparent
that
the
effect
of
applying
that
rule
of
construction
was
in
those
particular
cases
to
defeat
rather
than
to
implement
the
intention
of
the
testator.
However,
over
the
course
of
the
century
and
a
half
since
the
rule
was
formulated,
the
courts
have
become
more
and
more
reluctant
to
apply
the
rule,
if
to
do
so
would
defeat
the
obvious
intention
of
the
testator
and
as
Hanbury
says
in
his
Modern
Equity,
p.
241,
"‘the
rule
is
almost
swamped
by
the
exceptions
to
it.”
Dysart,
J.A.,
although
one
of
the
majority
of
the
Manitoba
Court
of
Appeal
which
applied
the
rule
in
In
re
Lennox
Estate,
supra,
said:
‘‘.
the
court,
in
applying
the
rule
has
leant
against
conversion
as
strongly
as
is
consistent
with
the
supposition
that
the
rule
itself
is
well
founded;’’
and
‘‘.
.
.
the
leaning
of
the
Judges
of
the
Court
of
Chancery
in
the
more
modern
cases
has
been
against
rather
than
in
favour
of
the
application
of
the
rule.’’
The
following
cases
are
illustrative
of
the
exceptions
which
have
been
formulated
to
the
application
of
the
rule
or
of
any
of
its
corollaries.
In
Bate
v.
Hooper
(1855),
5
De
G.M.
&
G.
338,
43
E.R.
901,
the
rule
was
not
applied
because
the
will
contained
an
express
direction
to
convert
and
invest
and
accordingly
the
same
result
was
obtained
without
the
application
of
the
rule.
In
Miller
v.
Miller
(1872),
L.R.
13
Eq.
263,
41
L.J.
Ch.
291,
there
was
a
trust
to
sell
or
convert
when
the
trustees
in
their
discretion
deemed
it
advisable,
coupled
with
a
provision
that
until
conversion
the
income
should
be
applied
in
the
same
manner
as
the
income
from
the
investment
of
moneys
which
would
be
realized
upon
sale.
This
was
held
to
take
the
case
out
of
the
rule.
In
Gray
v.
Siggers
(1880),
15
Ch.
D.
74,
49
L.J.
Ch.
819,
the
trustees
were
given
power
to
retain
or
convert
in
their
absolute
discretion
and
this
was
held
to
exclude
the
rule.
In
In
re
Chancellor
;
Chancellor
v.
Brown
(1884),
26
Ch.
D.
42,
53
L.J.
Ch.
443,
there
was
a
trust
for
sale
and
conversion
with
the
usual
power
of
postponement
coupled
with
a
direction
that
until
conversion
the
profits
and
income
should
be
applied
as
if
there
has
been
a
conversion.
The
rule
was
excluded
and
Brown
v.
Gellatly,
supra,
distinguished.
In
In
re
Thomas
;
Wood
v.
Thomas,
[1891]
3
Ch.
482,
60
L.J.
Ch.
781,
where
there
was
a
trust
for
conversion
and
for
investment
in
authorized
securities
coupled
with
a
discretion
to
retain
existing
securities,
the
rule
was
excluded
on
the
ground
that
the
use
of
the
words
‘‘for
the
time
being,’’
as
applied
to
the
income
directed
to
be
paid
to
the
tenant
for
life,
indicated
an
intention
that
the
tenant
for
life
was
to
enjoy
the
property
in
specie
until
conversion.
In
In
re
Crowther;
Midgley
v.
Crowther,
[1895]
2
Ch.
56,
64
L.J.
537,
a
trust
for
conversion
with
power
of
postponement
with
a
direction
that
until
conversion
the
income
was
to
be
applied
in
the
same
manner
as
the
income
of
the
trust
estate,
applying
In
re
Chancellor;
Chancellor
x.
Brown,
supra,
the
rule
was
held
not
applicable
and
it
was
held
that
the
trustees
had
power
in
the
interval
to
carry
on
the
testator’s
business
and
the
whole
of
the
profits
therefrom
were
properly
payable
to
the
tenant
for
life.
In
In
re
Pitcairn;
Brandr
et
h
v.
Colvin
(which
has
been
partially
quoted,
supra)
the
rule
was
excluded
on
the
ground
that
a
power
to
sell
and
convert
when
the
trustees
deemed
it
expedient
implied
a
power
not
to
sell—a
power
to
convert
or
not
as
the
trustees
saw
fit.
In
In
re
Bates;
Hodson
v.
Bates
(also
partly
quoted,
supra)
the
trustees
were
given
power
to
carry
on
the
testator’s
business
(which
had
been
a
colliery
business)
and
to
retain
investments,
which
included
shares
in
a
colliery
company,
of
a
hazardous
but
not
a
wasting
character.
It
was
held
that
this
power
to
retain
investments
was
sufficient
to
exclude
the
application
of
the
rule.
Another
quotation
from
the
judgment
of
Kekewich,
J.,
seems
appropriate
at
this
point:
‘‘It
seems
to
me
that
the
direction
to
retain
investments
really
adds
the
shares
in
question
to
the
list
of
authorized
investments
.
.
.
These
colliery
shares
thus
became
authorized
securities.
It
seems
to
me
that
the
income
of
authorized
securities
must
be
paid
to
the
tenant
for
life.’’
In
In
re
Wilson;
Moore
v.
Wilson,
[1907]
1
Ch.
394,
76
L.J.
Ch.
210,
the
rule
was
excluded
because
the
will
contained
a
power
to
retain
investments
and
there
was
no
trust
for
conversion.
In
In
re
Elford;
Elf
ord
v.
Elf
ord,
[1910]
1
Ch.
814,
79
L.J.
Ch.
380,
there
was
a
trust
for
conversion
at
such
time
and
in
such
manner
as
the
trustee
should
see
fit
coupled
with
an
express
power
to
postpone,
except
as
to
the
testator’s
business
in
Sicily,
the
income,
pending
conversion,
to
be
dealt
with
as
if
income
from
the
proceeds
of
conversion.
The
rule
was
excluded
following
In
re
Chancellor;
Chancellor
v.
Brown
and
In
re
Crowther
;
Midgley
v.
Crowther,
supra,
and
this
exclusion
was
held
to
apply
even
to
the
profits
from
the
Sicilian
business
on
the
ground
that
the
words
""all
the
income
arising
from
my
estate’’
directed
to
be
paid
to
the
life
tenant,
included
profits
arising
from
the
business.
In
In
re
Godfree;
Godfree
v.
Godfree,
[1914]
2
Ch.
110,
83
L.J.
Ch.
734,
a
trust
for
conversion
with
power
to
postpone
and
a
direction
to
invest
the
proceeds
in
the
manner
authorized
by
the
will
and
to
divide
the
residuary
estate
into
a
certain
number
of
shares
and
to
pay
the
income
from
each
share
to
the
beneficiary
thereof,
it
was
held
following
In
re
Thomas;
Wood
v.
Thomas,
supra,
that
the
application
of
the
rule
was
excluded,
the
judgment
being
based
principally
on
the
use
of
the
word
"
(
divide”
which
the
court
said
indicated
an
intention
that
the
property
be
enjoyed
in
specie.
In
In
re
Bate,
[1938]
4
All
E.R.
218,
there
was
a
trust
for
sale
and
conversion
with
the
usual
power
of
postponement
coupled
with
a
power
to
retain
investments
subsisting
at
death
so
long
as
the
trustees
should
think
proper,
and
a
direction
that
until
conversion
the
profit
and
income
of
unconverted
property
should
be
applied
as
if
income
from
the
proceeds
of
conversion.
The
court
held
the
rule
not
applicable.
In
In
re
Fisher;
Harris
v.
Fisher,
[1943]
Ch.
377,
113
L.J.
Ch.
17,
[1943]
2
All
E.R.
615,
Bennett,
J.,
said
that
where
there
is
a
trust
for
conversion
with
a
power
to
postpone,
the
rule
in
Howe
v.
Dartmouth
(Earl),
supra,
never
arises
unless
the
terms
of
the
trust
are
not
complied
with,
that
it
can
only
arise
where
there
is
a
residuary
bequest
to
persons
in
succession
with
no
trust
for
conversion.
In
re
Holliday
9
s
Will
Trusts;
Houghton
v.
Adlard,
[1947]
Ch.
402,
[1947]
L.J.R.
1086—a
trust
for
sale
and
conversion
with
the
usual
power
of
postponement
and
a
direction
that
until
conversion
the
income
be
applied
as
if
conversion
had
taken
place
without
regard
to
the
amount
there-
of
or
to
the
wasting
or
hazardous
nature
of
the
investments.
The
trustees
did
not,
in
fact,
exercise
their
discretion
to
postpone
but
it
was
held
distinguishing
Rowlls
v.
Bebb,
supra,
and
despite
the
judgment
in
In
re
Hey’s
Settlements
Trusts;
Hey
v.
Nickell-Lean,
supra,
that,
since
the
interests
in
question
were
immediate
interests
and
were
providing
income,
it
was
not
necessary
for
the
trustees
at
the
time
of
the
testator’s
death
to
exercise
any
discretion
as
to
whether
to
sell
or
retain
and
that
the
rule
in
In
re
Earl
of
Chesterfield’s
Trusts,
supra,
did
not
therefore
apply
to
an
income-producing
fund
which
was
absolutely
vested
in
the
trustees.
In
re
Gilroy
Estate
(No.
3),
[1938]
1
W.W.R.
657,
46
Man.
R.
34,
is
not
in
reality
a
case
in
point
as
there
were
no
conflicting
interests
between
a
tenant
for
life
and
remaindermen.
It
is
important
only
because
of
the
very
clear-cut
refusal
of
the
Manitoba
Court
of
Appeal
to
interfere
with
the
freedom
of
discretion
to
postpone
conversion
given
by
the
will
to
trustees.
It
is
clear
from
this
hasty
review
of
the
authorities
that
the
question
in
any
particular
case
as
to
whether
the
rule
in
Howe
v.
Dartmouth
(Karl)
or
any
of
its
corollaries
is
or
is
not
to
be
applied
resolves
itself
into
a
determination,
from
a
perusal
of
the
whole
will,
of
the
intention
of
the
testator.
While
the
onus
is
on
the
person
asserting
that
the
rule
has
no
application
to
establish
a
contrary
intention
on
the
part
of
the
testator,
nevertheless,
if
the
presence
of
such
contrary
intention
is
manifested
by
the
provisions
of
the
will,
the
court
must
give
effect
to
that
intention.
The
rule
of
construction
embodied
in
the
rule
in
Howe
v.
Dartmouth
(Earl)
and
its
corollaries
was
never
intended
to
do
more
than
to
give
effect
to
an
intention
which
the
court,
in
the
absence
of
any
clear
indication
of
intention,
presumed
the
testator
to
have
had.
If
the
actual
intention
can
be
ascertained
the
court
should
not
presume
some
other
intention.
Accordingly,
in
this
case,
as
in
all
cases
of
interpretation
of
wills,
it
is
necessary
to
examine
carefully
the
testator’s
will
to
see
if
it
contains
any
expressions
of
his
intention,
or
any
expressions
from
which
his
real
intention
can
be
clearly
implied.
There
is
in
the
first
place
a
trust
for
realization
and
conversion
of
the
whole
estate
coupled
with
‘‘full
power’’
to
postpone
such
realization
and
conversion
‘‘until
my
trustees
may
in
their
absolute
discretion
deem
the
time
favourable
and
opportune’’
and
a
direction
that
no
part
of
the
estate
shall
be
realized
or
converted
without
the
consent
of
all
the
trustees
then
acting.
There
is
no
general
direction
for
investment,
so
that
apart
from
any
specific
provisions
in
the
will
the
trustees
would
undoubtedly
be
restricted
in
the
investment
of
the
proceeds
of
conversion
to
"‘trustee
investments.’’
No
further
indication
of
the
testator’s
intention
appears
until
we
read
clause
9
of
the
will
(quoted
in
full,
supra).
The
first
paragraph
of
this
clause
confers
a
discretionary
power
on
the
trustees—a
power,
‘‘if
in
their
absolute
discretion
and
opinion
it
appears
necessary’’
to
set
aside
from
the
estate,
before
payment
to
any
beneficiary,
a
capital
sum
sufficient
to
acquire
the
proportionate
part
which
the
testator
may
be
entitled
to
purchase,
of
any
shareholdings
of
Royal
Hotel
Company
Limited
which
may
be
offered
for
sale
by
any
other
shareholders
of
that
company.
This
power
is
limited
to
such
period
"‘as
my
holdings
in
the
said
Royal
Hotel
Company
Limited
do
not
comprise
a
majority
of
the
authorized
shares
in
said
Hotel
Company.”
In
passing
I
should
point
out
that
Mr.
Cairns,
acting
for
the
public
trustee,
who
represents
the
infant
remaindermen,
argues
that
the
expression
‘‘authorized
shares’’
means
‘‘issued
shares’’
and
that
in
purchasing
the
additional
3,280
Royal
Hotel
shares
the
trustees
exceeded
the
authority
conferred
by
this
paragraph
by
1,092
shares,
as
only
2,188
shares
needed
to
be
purchased
to
give
the
estate
a
majority
of
the
17,500
issued
shares.
I
may
say
that
I
am
quite
unable
to
agree
with
this
argument.
The
terms
‘‘authorized
shares’’
and
‘‘issued
shares”
have
very
long-standing
and
contrasting
meanings.
In
this
case
we
have
a
will
drawn
by
a
very
experienced
solicitor
entirely
familiar
with
the
contrasting
meanings
of
the
two
expressions.
There
is
nothing
ambiguous
about
the
expression
‘‘authorized
shares
’
‘
and
nothing
elsewhere
in
the
will
to
indicate
that
it
is
used
in
any
sense
other
than
its
ordinary
sense,
and
I
can
see
no
basis
whatever
for
the
argument
that
it
is
to
be
understood
in
any
sense
other
than
its
plain,
ordinary,
recognized
meaning.
I
find
that
the
trustees
did
not,
in
purchasing
the
additional
3,280
Royal
Hotel
shares,
exceed
any
power
and
authority
conferred
upon
them
by
either
the
first
or
second
paragraphs
of
clause
9
of
the
will.
The
second
paragraph
of
clause
9
does
something
more
than
confer
a
discretionary
power
on
the
trustees—it
is
a
clear
direction
to
them
to
acquire
"any
such
further
shares
in
the
Royal
Hotel
Company
Limited
as
may
be
from
time
to
time
or
at
any
time
offered
for
sale
by
any
other
shareholder
of
said
Royal
Hotel
Company
Limited”—it
is,
in
short,
a
trust
for
investment
which
the
trustees
cannot
ignore.
The
first
paragraph
of
the
clause
confers
a
discretionary
power
on
the
trustees
to
set
up
a
capital
fund
for
the
purchase
of
these
shares,
but
the
second
paragraph
directs
their
purchase
whether
or
not
the
fund
has
been
set
up.
The
use
of
the
word
"‘such’’
in
the
expression
"‘such
further
shares’‘
undoubtedly
limits
the
application
of
this
paragraph
to
the
shares
referred
to
in
the
first
paragraph—in
other
words,
it
is
effective
only
so
long
as
the
estate
does
not
own
a
majority
of
the
"authorized
shares’’
of
the
company.
In
my
opinion,
so
long
as
the
estate
does
not
own
a
majority
of
the
"‘authorized
shares,’’
as
I
have
defined
that
expression,
an
absolute
duty
or
trust
is
imposed
upon
the
trustees
to
acquire
any
shares
offered
for
sale
by
the
other
shareholders.
Clause
9
concludes
with
a
third
paragraph
whereby
the
""
paragraph”
(by
which
is
undoubtedly
meant
‘‘clause’’)
is
not
to
be
construed
as
restricting
the
trustees
in
the
sale
of
any
part
of
the
estate
4
or
as
restricting
their
right
and
authority
to
sell
my
holdings
in
the
said
Hotel
Company.’’
While
it
is
not
essential
on
this
application
to
interpret
the
effect
of
this
last
paragraph,
I
may
say
that
if
the
trustees
acting
under
its
authority
had
disposed
of
all
the
estate’s
holdings
in
the
hotel
company,
and
were
seeking
an
interpretation
of
the
second
paragraph
in
the
light
of
that
circumstance,
I
would
be
inclined
to
hold
as
a
matter
of
practicality
and
common
sense
that
the
trust
imposed
by
the
second
paragraph
to
purchase
Royal
Hotel
shares
offered
by
other
shareholders
ceased
when
the
estate’s
holdings
in
the
hotel
company
were
disposed
of.
Now,
it
seems
to
me
that
the
question
of
whether
the
rule
in
Howe
v.
Dartmouth
(Earl)
in
any
of
its
forms
applies
to
this
will
is
largely
dependent
on
the
interpretation
of
the
aforesaid
clause
9,
coupled
with
the
expressions
used
in
the
first
part
of
elause
10
to
which
I
will
shortly
refer.
What
was
the
testator’s
intention
in
inserting
this
clause
in
his
will?
What
purpose
was
he
seeking
to
achieve?
It
was
stated
by
counsel
for
the
trustees,
and
was
not
contradicted,
that
the
acquisition
and
operation
of
the
Royal
Hotel
was
the
deceased’s
life
ambition
and
achievement.
It
seems
clear,
then,
that
the
purpose
behind
the
inclusion
of
clause
9
was
to
ensure
that
the
operation
of
the
hotel
would
not
pass
out
of
the
hands
of
the
trustees—in
other
words,
the
testator
was
endeavouring
to
ensure
that
his
business
would
continue
to
be
carried
on
by
his
trustees,
subject,
however,
to
the
very
wise
precaution
that
they
might
dispose
of
that
business
if
and
when,
in
their
discretion,
they
deemed
it
advisable
to
do
so.
It
was
suggested
in
argument
that,
even
though
the
trustees
were
directed
to
purchase
additional
hotel
shares,
this
did
not
excuse
them
from
the
obligation
of
con-
verting
the
shares
held
by
the
testator
at
the
time
of
his
death,
and
that
the
rule
in
Howe
v.
Dartmouth
(Karl)
applied
to
these
shares
even
though
it
might
not
apply
to
the
additional
shares
purchased.
To
give
effect
to
this
argument
would
be
to
destroy
the
testator’s
whole
purpose
and
intention
as
set
out
in
or
implied
from
clause
9.
It
would
be
futile
to
direct
the
trustees
to
purchase
additional
shares
so
that
the
estate
might
hold
a
majority
of
the
"‘authorized
shares’’
and
at
the
Same
time
to
direct
them
to
sell
similar
shares
so
that
the
majority
would
be
immediately
lost
and
the
purchase
of
the
additional
shares
rendered
meaningless.
To
place
such
a
construction
on
the
clause
would
be
to
impute
to
the
testator
a
complete
lack
of
business
sense—in
fact,
a
complete
lack
of
ordinary
common
sense—and
I
think
the
court
is
not
justified
in
making
any
such
imputation.
In
my
opinion,
the
clear
meaning
of
clause
9,
and
the
clear
intention
of
the
testator,
as
expressed
by
that
elause
and
as
implied
by
the
words
and
expressions
used,
is
that
the
trustees
are
for
an
indefinite
time
to
carry
on
the
business
of
the
testator,
for
that
purpose
to
acquire
as
the
same
are
offered
for
sale
sufficient
additional
shares
of
the
hotel
company
to
eonstitute
a
majority
of
the
authorized
shares
of
that
company,
and
also
for
that
purpose
to
retain
the
shares
of
the
company
held
by
the
testator
at
the
time
of
his
death,
all
subject
to
the
absolute
discretion
and
power
of
the
trustees
when
they
deem
the
time
"favourable
and
opportune’’
to
dispose
of
the
estate’s
entire
holdings
in
the
hotel
company.
To
give
to
the
clause
any
other
meaning
would,
in
my
opinion,
be
to
run
counter
to
the
clear
intention
of
the
testator,
and
to
substitute
for
his
expressed
intention
some
other
intention
merely
presumed
by
the
court.
Since
the
interpretation
I
place
on
this
clause
involves
the
indefinite
holding
of
the
hotel
shares
owned
at
the
time
of
death
as
well
as
the
shares
afterwards
acquired,
what
is
the
position
of
these
shares
as
regards
the
application
of
the
rule
in
Howe
v.
Dartmouth
(Earl)
or
any
of
its
corollaries?
It
must
be
remembered
that
the
rule
relates
to
property
of
a
wasting
and
future
or
reversionary
nature
or
which
consists
of
unauthorized
securities.
There
is
no
suggestion
that
these
shares
are
of
a
wasting
character—if
the
rule
is
to
be
applied
it
must
be
applied
on
the
sole
ground
that
the
shares
constitute
unauthorized
investments.
but
how
ean
it
be
said
that
investments
are
unauthorized
if
they
are
the
very
investments
not
only
sanctioned
but
directed
bv
the
testator?
In
Brown
V.
Gellatly,
supra,
although
it
was
a
case
in
which
the
rule
was
to
a
large
extent
applied,
Cairns,
L.C.,
pointed
out
that
the
tenants
for
life
were
entitled
to
the
actual
income
derived
from
securities
mentioned
in
the
will
as
being
proper
investments.
Kekewich,
J.,
in
In
re
Thomas;
Wood
v.
Thomas,
supra,
said
:
"‘But
I
have
no
doubt
that
one
looks
out
with
an
expectant
eye
for
a
direction
that
the
tenant
for
life
shall
receive
the
income,
where
there
is
an
express
direction
to
the
trustees
to
retain
securities,
or
any
indication
of
the
testator’s
intention
that
they
shall
remain
indefinitely
for
so
long
as
they
may
think
fit
.
.
.
I
have
no
difficulty
in
finding
it
[i.e.,
such
direction]
here.’’
He
is
of
the
opinion
that
the
mere
fact
that
a
security
is
authorized
is
not,
standing
alone,
sufficient,
but
that
there
must
in
addition
be
some
direction
that
the
life
tenant
shall
enjoy
in
specie
and
he
finds
such
a
direction
in
the
will
under
consideration.
With
all
respect,
I
should
be
inclined:
to
think
that
in
these
modern
times,
with
the
growing
tendency
to
get
away
from
the
application
of
artificial
rules
of
construction,
and
keeping
in
mind
the
remarks
of
the
House
of
Lords
in
Perrin
v.
Morgan,
supra,
to
find
that
an
investment
is
expressly
authorized
by
the
will
would
be
equivalent
to
a
finding
that
the
rule
did
not
apply
to
that
investment,
but,
however
that
may
be,
I,
like
Kekewich,
J.,
find,
as
will
appear
in
a
moment,
some
direction
in
this
will
that
the
tenant
for
life
is
to
enjoy
in
specie.
Kekewich,
J.,
16
years
later,
himself,
went
further
in
In
re
Bates;
Hodson
v.
Bates,
supra,
than
he
had
gone
in
In
re
Thomas;
Wood
v.
Thomas,
and
in
this
later
case
said:
4
It
seems
to
me
that
the
direction
to
retain
investments
really
adds
the
shares
in
question
to
the
list
of
authorized
investments.
.
.
.
These
colliery
shares
thus
became
authorized
securities.
It
seems
to
me
that
the
income
of
authorized
securities
must
be
paid
to
the
tenant
for
life.’’
With
respect,
I
think
his
statement
of
the
law
in
the
later
rather
than
in
the
earlier
case
is
the
correct
statement.
However,
I
think
a
proper
interpretation
of
clause
10
of
the
will
brings
the
case
within
Kekewich,
J.’s,
earlier
statement
as
well.
Clause
10
which
provides
for
payment
of
income
to
the
tenant
for
life
commences
with
these
words
:
‘‘After
provision
has
been
made
for
carrying
the
foregoing
directions
into
effect,
I
direct
my
trustees
to
pay
the
entire
income
from
the
residue
of
my
estate
to
my
daughter.
Now,
the
"‘foregoing
directions’’
include
the
directions
to
acquire
further
Royal
Hotel
shares,
and,
by
implication,
to
retain
indefinitely
Royal
Hotel
shares
held
at
the
time
of
the
testator’s
death.
Having
clearly
in
mind
the
‘‘foregoing
directions”
and
the
consequent
investment
in
and
holding
of
Royal
Hotel
shares
by
the
trustees,
the
testator
directs
his
trustees
to
pay
the
‘‘entire
income
from
the
residue
of
my
estate’’
to
his
daughter.
It
seems
to
me
that
this
is
a
clear
indication
of
the
testator’s
intention
that
the
daughter
is
to
enjoy
that
part
of
the
residual
estate
which
consists
of
these
shares
in
specie
and
is
to
receive
the
‘‘entire
income’’
from
these
shares.
Counsel
for
the
public
trustee
relied
particularly
on
the
recent
cases
of
In
re
Parry;
Brown
v.
Parry,
and
In
re
Lennox
Estate,
supra,
so
before
concluding
this
part
of
my
judgment
I
should
probably
make
some
special
reference
to
these
two
eases
and
indicate
why
I
think
they
are
distinguishable
from
the
case
I
am
now
considering.
In
the
first
place,
in
In
re
Parry;
Brown
v.
Parry,
counsel
admitted
that
the
court
in
which
the
ease
was
argued
was
bound,
on
the
basis
of
previous
authorities,
to
apply
the
rule,
but
reserved
the
right
to
argue
in
the
court
above
that
the
rule
should
not,
in
the
past,
have
been
applied
to
cases
where
the
trust
for
conversion
is
coupled
with
a
discretionary
power
to
postpone
conversion
for
an
indefinite
time.
Romer,
J.,
accordingly
approached
the
problem
on
the
footing
that
the
rule
applied.
In
the
second
place,
in
that
part
of
the
judgment
of
Romer,
J.,
quoted,
supra,
it
will
be
observed
that
he
definitely
limits
the
application
of
the
rule
to
cases
where
‘‘there
was
no
sufficient
indication
that
the
testator
intended
the
income
beneficiaries
to
enjoy
the
property
in
specie.’’
As
I
have
said,
in
my
opinion
there
is
in
the
Webster
will
a
clear
indication
that
the
income
beneficiary
was
to
enjoy
the
property
in
specie,
and
accordingly
this
case
is
clearly
distinguishable
from
the
Parry
case.
In
In
re
Lennox
Estate,
supra,
the
situation
was
that
the
chief
asset
of
the
estate
was
a
one-quarter
share
in
the
residue
of
the
estate
of
the
testator’s
brother,
and
the
major
asset
of
the
latter
estate
consisted
of
certain
unconverted
shares,
the
“Sisman
stock,”
which
paid
large
annual
dividends
but
was,
of
course,
not
a
trust
investment.
The
testator
directed
the
residue
of
his
estate
to
be
invested
in
such
securities
as
his
executors
deemed
advisable
and
the
income
thereof
paid
to
his
wife,
with
a
further
direction
that
his
executors
might,
if
they
deemed
it
advisable,
pay
to
the
wife
annually
an
additional
sum
not
exceeding
5
per
cent
of
capital.
It
was
held
following
In
re
Parry;
Brown
v.
Parry,
supra,
that
the
rule
in
Howe
v.
Dartmouth
(Earl)
applied,
and
that
the
widow
was
therefore
entitled
from
the
time
of
the
testator’s
death
only
to
4
per
cent
on
the
value
of
the
stock
at
the
time
of
death.
In
the
Manitoba
Court
of
Appeal,
Coyne,
J.A.,
in
a
very
strong
dissenting
judgment,
said
that
the
rule
in
Howe
v.
Dartmouth
(Karl)
had
not
even
a
prima
facie
application
to
that
case.
Quoting
from
Theobald
on
Wills,
9th
ed.,
p.
452,
he
said:
""
"
A
general
power
to
retain
any
part
of
the
estate,
as
invested
at
the
testator’s
death,
gives
the
tenant
for
life
the
income
of
unauthorized
securities
which
are
retained,
whether
they
are
wasting
or
not.’
”’
And
he
goes
on
to
say:
‘“The
rule
was
invented
as
the
Howe
v.
Dartmouth
(Earl)
judgment
shows,
for
the
purpose
of
giving
effect
to
the
intention
of
the
testator.
That
case
was
decided
150
years
ago
at
a
time
when
there
were
a
great
many
rigid
and
technical
rules
for
the
interpretation
of
wills
which
the
court
had
formulated,
and
for
some
time
continued
to
formulate,
rules
which
very
often
defeated
the
testator’s
intention.
At
present,
as
I
take
the
law
to
be,
the
intention
of
the
testator
is
to
be
derived
from
the
language
of
the
will
and
the
circumstances
of
the
case,
and
technical
rules
are
only
to
be
resorted
to
when
the
intention
cannot
be
drawn
from
the
will
or
the
circumstances.”
He
points
out
that
nothing
is
said
in
this
will
as
to
conversion
or
as
to
the
retention
of
existing
investments
but
that
the
executors
are
given
complete
discretionary
power
to
invest
in
such
securities
as
they
deem
advisable,
and
considers
that
under
this
power
the
executors
might
have
purchased
Sisman
stock.
Dysart,
J.A.,
although
forming
one
of
the
majority,
quotes
with
approval
Baggallay,
L.J.,
in
MacDonald
v.
Irvine
(1878),
8
Ch.
D.
101,
47
L.J.
Ch.
494:
"
“Courts
of
Equity
have
consequently
always
declined
to
apply
the
rule
in
cases
in
which
the
testator
has
indicated
an
intention
that
the
property
should
be
enjoyed
in
specie,
though
he
may
not
in
a
technical
sense
have
specifically
bequeathed
it.’
”’
But
he
goes
on
to
say—and
here
he
differs
from
Coyne,
J.A.—
that
it
is
clear
from
the
authorities
that
unless
the
will,
beyond
all
reasonable
doubt,
enlarges
the
powers
of
investment
beyond
what
the
general
law
sanctions,
the
investment
of
trust
funds
must
be
confined
to
securities
within
the
range
of
those
legally
sanctioned,
and
that
accordingly
the
executor
in
the
Lennox
case
had
no
power
to
invest
in
or
retain
Sisman
shares.
Even
though
I
might,
with
respect,
prefer
that
part
of
the
dissenting
judgment
of
Coyne,
J.A.,
which
deals
generally
with
the
application
of
the
rule
in
Howe
v.
Dartmouth
(Earl)
since
the
Supreme
Court
of
Canada
affirmed
the
majority
judgment
I
would
be
bound
by
its
judgment
unless
this
ease
is
distinguishable
from
the
Lennox
case.
The
judgment
of
the
Supreme
Court
of
Canada,
however,
went
wholly
on
the
ground
that
the
provisions
as
to
investments
in
the
Lennox
will
did
not
give
the
executor
power
to
retain
or
invest
in
unauthorized
securities
and
therefore
the
Sisman
shares
must
be
converted
and
deemed
to
be
converted
and
the
widow
was
only
entitled
to
4
per
cent
on
their
value
as
at
the
death
of
the
testator.
Now,
as
I
have
pointed
out,
in
the
case
now
under
consideration,
the
trustees
are
not
merely
given
a
general
power
to
invest
in
unauthorized
securities;
they
are
definitely
directed
to
invest
in
a
particular
security
which
would
otherwise
be
unauthorized.
A
trust
for
investment
in
these
particular
shares
is
created,
which
carries
with
it
an
implied
trust
for
an
indefinite
period
to
retain
the
shares
held
by
the
testator
at
the
time
of
his
death.
Therefore,
the
Lennox
case
and
its
ratio
decidendi
can
have
no
application
to
the
Webster
will—the
cases
are,
in
my
opinion,
clearly
distinguishable.
As
to
the
shares
in
Sicks’
Breweries
Limited,
there
is
nothing
in
the
will
which
would
establish
these
as
authorized
investments,
nor
which
would
indicate
that
the
tenant
for
life
shall
enjoy
them
in
specie.
Accordingly,
the
answer
to
question
1
is:
A
valuation
should
be
placed
on
the
shares
of
Sicks’
Breweries
Limited
as
at
the
time
of
the
testator’s
death
and
interest
should
be
paid
to
the
tenant
for
life
on
the
amount
of
such
valuation
at
the
rate
of
4
per
cent
per
annum
from
the
date
of
the
testator’s
death.
Any
surplus
income
should
be
treated
as
capital
and
be
invested
in
authorized
securities
and
the
income
therefrom
paid
to
the
tenant
for
life
from
the
time
of
receipt
of
such
surplus
income.
As
to
the
shares
of
Royal
Hotel
Company
Limited,
the
whole
income
therefrom
should
be
paid
to
the
tenant
for
life
until
conversion.
Upon
conversion
the
whole
proceeds
thereof
should
be
deemed
to
be
capital,
and
should
be
invested
in
authorized
securities
and
the
income
thereof
paid
to
the
tenant
for
life
from
the
time
of
such
conversion.
As
to
question
2,
it
seems
to
me
that
except
as
to
the
matter
of
succession
duties,
the
answer
involves
no
difficulties.
As
to
debts,
funeral
and
testamentry
expenses
and
annuities
and
legacies,
the
rule
in
Allhusen
v.
Whittell,
supra,
should
be
applied,
and
the
trustees,
whatever
fund
they
may
have
paid
them
from,
shall
be
deemed
to
have
paid
them
with
such
portion
of
capital,
together
with
the
income
on
that
portion
for
one
year
(or
if
these
debts,
etc.,
were
paid
in
less
than
one
year
after
the
testator’s
death
then
with
the
income
on
that
portion
of
the
capital
for
such
part
of
one
year)
as
may
be
sufficient
for
the
purpose.
The
only
difficulty
arises
when
we
come
to
consider
the
matter
of
succession
duties.
It
will
be
observed
that
succession
duties
are
not
mentioned
in
clause
2
of
the
will
which
deals
with
payment
of
debts
and
funeral
and
testamentary
expenses,
but
by
clause
14
(quoted
in
full,
supra)
the
testator
"directs''
that
"'my
estate
shall
pay
all
and
any
succession
duties’’
in
respect
of
any
benefits
under
the
will.
I
think
it
well
first
to
dispose
of
a
suggestion
by
Mr.
Mann
that
succession
duties
are
‘‘debts’’
and
so
come
within
the
provisions
of
clause
2
of
the
will.
The
obligation
for
payment
of
succession
duties
did
not
arise
until
the
testator’s
death.
They
cannot
come
within
the
category
of
"‘my
just
and
lawful
debts’’
mentioned
in
clause
2.
They
may
be
debts
of
the
estate
or
of
the
trustees
or
of
the
beneficiaries,
but
they
were
not
and
never
could
be
debts
of
the
testator.
Accordingly,
so
far
as
the
will
is
concerned,
the
whole
matter
of
the
incidence
of
succession
duties
is
to
be
determined
by
an
interpretation
of
clause
14
of
the
will.
Does
the
clause
have
the
effect
of
imposing
the
burden
of
payment
on
the
estate,
or
on
some
fund
of
the
estate,
and
of
conferring
the
benefits
received
by
the
legatees
and
annuitants
free
from
succession
duty
?
A
perusal
of
sec.
6
and
sees.
10
to
14
of
The
Dominion
Succession
Duty
Act,
1940-41,
ch.
14,
makes
it
clear
that,
while
every
"successor”
is
liable
for
the
duty
imposed
by
the
Act
in
respect
of
his
succession,
all
the
duties
levied
under
the
Act
are
primarily
payable
by
the
executor
and
may
be
recovered
from
him
in
his
capacity
as
executor.
In
making
the
provision
contained
in
clause
14
of
the
will,
the
testator
was
merely
directing
his
trustees
to
do
what
they
were
in
any
event
legally
liable
to
do.
Mr.
Mann
has
made
some
point
of
the
fact
that
while
in
the
earlier
part
of
the
will
the
expression
invariably
used
by
the
testator
is
‘‘I
direct
my
trustees,’’
etc.,
in
this
clause
the
expression
is
"I
direct
that
my
Estate
shall
pay,”
etc.,
and
argues
that
the
use
of
the
word
"estate”
is
a
clear
indication
of
the
intention
of
the
testator
that
his
estate
generally—which
would,
of
course,
mean
the
residuary
estate—shall
pay
all
succession
duties,
and
that
the
effect
of
the
clause
is
to
make
an
additional
gift
to
all
legatees
other
than
the
residual
legatees
of
a
sufficient
amount
to
pay
the
succession
duty
otherwise
payable
by
each
of
them,
and
so
to
confer
on
them
their
benefits
under
the
will
free
from
succession
duty.
It
will
be
observed
that
nowhere
in
this
will
is
there
any
direction
that
legacies
shall
be
free
of
succession
duties,
or
that
succession
duties
shall
be
a
first
charge
on
the
estate,
and
I
think
a
perusal
of
the
authorities
makes
it
clear
that
a
general
direction
to
the
executors
to
pay
succession
duties
out
of
the
estate
does
not
have
the
effect
contended
for
by
Mr.
Mann,
unless
there
is
some
indication
of
the
source
or
fund
from
which
such
duties
are
to
be
paid.
Had
the
direction
as
to
payment
of
succession
duties
been
included
in
clause
2
of
the
will
and
then
had
followed
clause
10
providing
for
payment
of
income
from
the
residue
‘‘after
provision
has
been
made
for
carrying
the
foregoing
directions
into
effect,’’
I
think
it
would
have
amounted
to
a
clear
indication
of
the
intention
of
the
testator
that
all
benefits
conferred
by
the
clauses
previous
to
clause
10
were
conferred
free
from
succession
duty
and
that
no
residue
arose
until,
inter
alia,
succession
duties
on
previous
bequests
had
been
paid.
But,
appearing
where
it
does,
after
the
residue
has
been
ascertained,
and
among
the
administrative
provisions
of
the
will,
and
without
any
indication
of
the
source
from,
which
payment
is
to
be
made,
the
direction
cannot,
in
my
opinion,
amount
to
a
manifestation
of
the
intention
of
the
testator
to
confer
additional
gifts
on
any
of
the
beneficiaries,
nor
be
regarded
as
anything
more
than
an
administrative
provision
directing
the
trustees
to
do
what
they
were
already
bound
in
law
to
do.
I
refer
to
the
following
cases
which
comprise
those
in
which
the
direction
for
payment
of
succession
duties
has
been
deemed
sufficient
as
well
as
those
in
which
it
has
not
been
so
deemed:
In
re
Eve;
Hall
v.
Eve,
[1917]
1
Ch.
562,
86
L.J.
Ch.
396;
In
re
Kennedy
;
Corbould
v.
Kennedy,
[1917]
1
Ch.
9,
86
L.J.
Ch.
40;
In
re
Tanqueray;
Sewell
v.
Woodfield,
[1924]
W.N.
142;
In
re
Anderson
Estate;
Can.
Permanent
Trust
Co.
v.
McAdam,
[1928]
2
W.W.R.
365,
22
Sask.
L.R.
610;
In
re
Blowey
Estate,
[1935]
3
W.W.R.
95,
50
B.C.R.
222
;
In
re
Dixon
Estate,
[1935]
3
W.W.R.
118,
50
B.C.R.
285
(affirmed
[1936]
1
W.W.R.
383,
50
B.C.R.
at
288)
;
he
Reading,
[1940]
O.W.N.
9
;
In
re
Johnson
Estate,
[1941]
2
W.W.R.
94,
49
Man.
R.
148;
Re
Shaw,
[1941]
O.R.
297;
Re
Prittie,
[1942]
O.W.N.
359;
Toronto
Gen.
Trusts
Corpn.
v.
Shaw,
[1942]
1
W.W.R.
78;
Re
Patterson,
[1943]
O.W.N.
736;
Re
Munroe,
[1943]
O.W.N.
617
;
Cave
and
Saunders
v.
Day,
[1945]
3.
W.W.R.
481,
62
B.C.R.
177;
Re
Shiff,
[1949]
O.W.N.
169.
The
answer
to
the
second
question
is:
The
debts
of
the
deceased,
funeral
and
testamentary
expenses,
legacies,
and
annuities,
should
be
paid
with
such
portion
of
the
capital
together
with
the
income
on
that
portion
for
one
year
(or
a
lesser
proportionate
amount
of
income
if
payment
was
made
prior
to
the
expiration
of
one
year
after
the
testator’s
death)
as
may
be
sufficient
for
the
purpose.
Succession
duties
should
be
borne
by
the
various
beneficiaries,
and
recovered
back
from
them,
with
interest,
if
payment
has
been
advanced
by
the
trustees.
The
third
question
appears
to
me
to
be
one
of
those
hypothetical
or
abstract
questions
referred
to
in
In
re
Gilroy
Estate,
supra,
and
with
respect
to
which
Truman,
J.A.,
said:
"The
Court
is
limited
to
giving
advice
or
directions
upon
facts
and
not
upon
abstract
questions.
‘
‘
And
Robson,
J.A.,
said:
"‘I
think
the
originating
notice
practice
should
not
be
used
for
mere
abstract
questions.’’
I
am
accordingly
somewhat
doubtful
if
I
have
any
jurisdiction
to
answer
this
question,
or
whether
if
I
did
purport
to
assume
jurisdiction
the
trustees
would
be
protected
in
acting
upon
any
advice
or
direction
I
might
give.
I
think
I
should
content
myself
by
saying
that
if
the
question
is
properly
before
me
my
answer
would
be
this:
The
discretionary
power
of
the
trustees
to
postpone
conversion
is
not
limited
in
point
of
time,
but
it
is
nevertheless
only
a
power
to
postpone,
and
does
not
destroy
the
previous
trust
for
conversion.
It
is
still
the
duty
of
the
trustees
to
convert,
when
in
their
absolute
discretion
they
deem
that
"‘a
favourable
and
opportune
time’’
for
conversion
has
arrived.
Since,
however,
this
matter
is
not
of
immediate
concern,
I
think
the
question
should
be
left
open,
and
my
answer
not
regarded
as
advice
or
direction
to
the
trustees.
If
at
any
future
time
the
matter
does
become
of
immediate
concern,
the
application
can
be
renewed
either
before
me
or
before
some
other
judge,
and
a
decision
arrived
at
as
to
whether
or
not
it
is
a
question
with
which
the
court
can
properly
deal.
Possibly
at
that
time
circumstances
will
have
arisen
which
will
take
the
question
out
of
the
hypothetical
or
abstract
field
and
make
it
apparent
that
the
court
has
jurisdiction
to
deal
with
it.
Both
the
trustees
and
the
public
trustee
shall
be
entitled
to
costs
of
this
application
out
of
the
estate,
but
such
costs
shall
be
charged
equally
to
the
tenant
for
life
and
the
remaindermen.
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