REVER SIONARY Co. [ *193 ] It is therefore upon the special circumstances of this case, MARRIOTT and not upon the ground of the mortgagee not being entitled THE ANCHOR to use or employ the ship prudently and in the due and ordinary course, that I concur in the principle of this decree; but agreeing in the principle of the decree, I regret to say, that I find myself unable to concur in the details of it. The VICE-CHANCELLOR has charged the defendants with the value of the ship at the time when they took possession of her. They took possession as mortgagees, and the acts done by them, although not done in the due exercise of their rights as mortgagees, were nevertheless, as it seems to me, done by them in that character. They had no power or authority to convert themselves into owners, and I am aware of no case in which the Court has dealt with the mortgagee as owner, and charged him with the value of the mortgaged property as if he had become so. There may possibly be cases in which it may be right to do so, where, for instance, there is a distinct and independent equity, but so far as I can see, there is none such in this case, and I think there is great danger in deviating from the settled forms of decrees, which furnish the best evidence of the law of the Court, and introducing new forms by which the law of the Court may be unsettled. A mortgagee of houses or lands, occupying the houses or farming the lands, is chargeable with an occupation rent, and upon the same principle I think the defendants ought to be charged with what the vessel might have earned if chartered in the ordinary course. I think, too, that the defendants ought to be charged with any damage, beyond ordinary wear and tear, which may have arisen in the course of their employment of the vessel; but with all respect to the VICE-CHANCELLOR, and all deference to the LORD CHANCELLOR and my learned brother, I think the decree should have gone no further, except of course in the usual direction as to wilful default. In my opinion, therefore, the decree ought to be altered in the mode which I have pointed out; but the LORD CHANCELLOR and my learned brother being of opinion that the decree, as it stands, ought to be affirmed, of course the appeal must be dismissed. IN RE THE AGRICULTURIST CATTLE INSURANCE COMPANY. 1861, May 30. (3 D. F. & J. 194-200.) [Obsolete procedure as to the appointment of an official manager by the Judge under the old Winding-up Acts.] 1861. June 5. KNIGHT BRUCE, TURNER, L.JJ. [ 201 ] 1861. June 6, 7. TURNER, L.JJ. IN RE THE ABERYSTWITH AND WELSH COAST RAILWAYS. (3 D. F. & J. 201.) When a deposit has been paid into Court under the Standing Orders of Parliament in respect of several undertakings comprised in one bill, and the bill is subsequently withdrawn as to some only of the undertakings, the promoters cannot, upon certificate of such withdrawal, obtain an immediate order for the payment out of Court of so much of the deposit as is estimated to be attributable to the abandoned undertakings. THEIR Lordships held that an order ought not to be made, there having been a withdrawal of part only of the bill. MACLAREN v. STAINTON (1). (3 D. F. & J. 202-216; S. C. 30 L. J. Ch. 723; 7 Jur. N. S. 691; 4 L. T. N. S. 715; 9 W. R. 908.) A person who was a shareholder in and manager of a Company, bequeathed some of his shares specifically to several persons absolutely, and gave the residue of his property to tenants for life, with remainders over. After his death it was discovered that large sums were due from him as manager to the Company, and a compromise was entered into with the sanction of the Court, by which his estate was to pay the Company 220,000l., a considerable part of which was attributable to interest accrued during the testator's life on the sums due from him. Immediately after the payment the Company disposed of this sum by declaring a bonus on its shares : Held, that the whole of the bonus on the shares specifically bequeathed belonged to the specific legatees. Held also, that, as between the tenants for life and remaindermen, the whole of the bonus on those shares which formed part of the residue belonged to the tenants for life as income. Figures used by a testator in a hotchpot clause, held to be merely used for the sake of giving an example to explain what the testator understood by hotchpot. HENRY STAINTON, the testator in this cause, was at his death, in December, 1851, entitled to eighty-one shares in the Carron Iron Company. By his will, dated the 12th of October, 1846, he gave ten of them specifically to his son Henry Tibbatts Stainton, and another ten of them to James Joseph Stainton. The rest formed part of his residuary personal estate, which, after payment of his debts, was directed to be divided into eight equal parts; two of which parts were directed to be allotted to each of his sons, one to the children of E. Brown, a deceased daughter. and one to each of his three surviving daughters. The allotted share of each son and daughter was given to such son or daughter for life, with remainder to his or her children, the (1) De Gendre v. Keni (1867) L. R. 4 Eq. 283 16 L. T. 694; In re Bouch, Sproule v. Bouch (1885) 29 Ch. D. 635, reversed (1887) 12 App. Cas. 385, 56 L. J. Ch. 1037, 57 L. T. 345, where accumulated profits distributed in the shape of new shares partly paid up were held to be capital and not income. The effect of that decision is that accumulated profits in a Company remain income unless they have been validly capitalized by the Company: In re Piercy, Whitwham v. Piercy [1907] 1 Ch. 289, 76 L. J. Ch. 116, 95 L. T. 868.-O. A. S. STAINTON. [ *203 ] terms of the will being such that the shares in the Carron Com- MACLAREN pany would not have to be converted. The will contained the following clause: "And whereas on the marriage of my said late daughter Elizabeth with S. W. Brown, I transferred to the trustees of her marriage settlement 2,000. stock of the East India Company, which I deem to be of the value of 5,000, and to produce 2107. per annum; and on the marriage of my said son Henry Tibbatts Stainton with his present wife, I *transferred to the trustees of his marriage settlement the sum of 10,0007. stock of the Governor and Company of the Bank of England, which I deem to be of the value of 20,0007., and to produce the sum of 700l. per annum; and I may advance or give property to or with my other children on their respective marriages, or otherwise for their respective advancement in the world: Now I do hereby declare my will to be, that the advancements so made to the said Elizabeth Brown and H. T. Stainton as aforesaid shall be brought into hotchpot and accounted for upon the following principle: Supposing the income of the residuary property divisible under this my will in respect of my children as aforesaid shall amount to the annual sum of 4,0007., to this shall be added the annual sum of 2107., the income of the fund advanced to the said Elizabeth Brown, and 7007., the income of the fund advanced to the said H. T. Stainton, making together the annual income of 4,9101., which, being divided into eight shares, leaves the annual sum of 6137. 15s. for each one-eighth part. The two-eighths directed to be allotted in respect of the said H. T. Stainton would therefore amount to 1,2277. 10s.; from this is to be deducted the annual income of the fund settled upon him, viz. 700l. per annum, so that his income of the share allotted in respect of him of and in my residuary property would amount to the annual sum of 5277. 10s. The income of the share in respect of the said E. Brown would be 6137. 15s.; from this is to be deducted the annual sum of 2107., the income of the fund settled upon her as aforesaid, leaving the annual sum of 4037. 15s. as the income of her share to be allotted in respect of her children in my residuary property under this my will. The said James Joseph Stainton the annual sum of 1,2277. 10s. ; Sarah Ann Stainton the annual income of 6137. 15s.; Charlotte Stainton the annual income of 6137. 15s., and Caroline Mary Stainton the annual income of 6131. 15s., which *annual sums of 5277. 10s., 4037. 15s., 1,2277. 10s., 6187. 15s., 6137. 15s. and 6137. 15s. make up the annual sum of 4,000l. And in case I advance or give property to any other of my children, I direct that the same principle shall be adopted in bringing the same into hotchpot as I have herein before directed with reference to [ *204 7 MACLAREN the property advanced to my said daughter Elizabeth Brown and my said son H. T. Stainton." r. STAINTON. [ *205 ] The testator had, from 1808 till his death, been the manager of the Carron Company in London. Upon his death the Company made large claims against his estate in respect of their monies which had come to his hands, and refused to transfer the shares standing in his name. A bill was filed by the executors to compel them to do so, and ultimately a compromise was made, on the terms, that the executors should pay the Company 220,0007., and that the Company should allow the transfer of the shares. This compromise became the subject of litigation, and the question was brought before the Court of Appeal, whether it extended to all claims against the testator's estate or only to claims arising on the accounts subsequent to 1825. Their Lordships decided that it only had the more limited effect. Such of the parties interested in the testator's estate as were sui juris, were willing to give effect to the compromise on this footing and it was approved by the Court on behalf of those who were infants. The result was, that the 220,000l. was paid out of the estate of the testator to the Company, and the shares were transferred, as to ten into the name of H. T. Stainton, ten into the name of J. J. Stainton, and the rest into the names of the executors. The payment of the 220,000l. was made on the 17th of May, 1858, along with a small further sum, 421. 16s. 1d. for interest. Of the total sum thus paid 191,664l. 2s. 4d. was principal with interest up to *the death of the testator, and 28,3977. 13s. 9d. interest accrued since his death. On the 26th of May, 1858, the Company upon sanctioning the transfers declared a bonus of 4701. per share upon all their shares, such bonus arising from the division among the shareholders of the 220,042l. 16s. 1d. thus received from Stainton's estate. The shares which had belonged to Stainton having the benefit of this bonus, various questions arose as to the mode of dealing with it. The MASTER OF THE ROLLS decided the following points: 1. That the sons were not entitled to the whole of the bonus on the shares absolutely bequeathed to them, but only to a part of it bearing to the whole the same proportion as 28,3977. 13s. 9d. to 220,0427. 16s. 1d., and that the rest of it, i.e., so much as was attributable to principal and interest accrued due in the testator's life, fell into his residuary estate as capital. 2. That the tenants for life of the remaining shares were not entitled to the whole of the bonus on those shares as income, but only to a part of it bearing to the whole the same proportion as 28,3971. 13s. 9d. to 220,0427. 16s. 1d., and that the rest of it was to be dealt with as capital. 3. That the advances to Elizabeth Brown and H. T. Stainton were not to be brought into hotchpot at the amounts mentioned in the will, irrespective of their real values, for that the figures were only given to show what the testator intended by hotchpot, and that the advances must be brought into hotchpot according to the income they were producing at the end of a year from the testator's death. From the order proceeding on this footing several appeals were brought. Mr. Roundell Palmer and Mr. Lewin for the two sons, [as to the first point, contended that the sons took the shares with all the dividends and bonuses declared after the testator's death. That the Company had a lien on the shares for the debt made no difference for the present purpose: Armstrong v. Burnett (1). Even if the shares had been mortgaged, the specific legatee would have been entitled to exoneration. On the second point, they contended that the bonus was in the nature of a dividend, and whether the Company call it dividend or bonus was immaterial. They cited Barclay v. Wainwright (2), Price v. Anderson (3), Preston v. Melville (4), Paris v. Paris (5), Brander v. Brander (6), Witts v. Steere (7), and Plumbe v. Neild (8). As to the third point, they said that the income of the advances was to be taken as the testator estimated it]. Mr. Lloyd for the trustees: If the specific legatees are not entitled to the bonus they have been over-paid, and the income to which they are entitled as tenants for life of shares in the residue ought to be impounded recoup the testator's estate. to Mr. Selwyn and Mr. Haynes for the testator's three The MASTER OF THE ROLLS, we submit, has rightly held that the testator did not intend to set a value on the advances, but merely ased figures to show on what plan he intended the hotchpot to be worked out. His estimate of the advances is hypothetical, just as his estimate of his whole income. Mr. Follett and Mr. Waller for the infant children of Mrs. As to the first point, the question arises under peculiar circumstances. The sum was paid under a compromise sanctioned by the COURT, which cannot be taken to have been intended to alter (1) 109 R. R. 481 (20 Beav. 424). (6) 4 R. R. 348 (4 Ves. 800). (7) 9 R. R. 192 (13 Ves. 363). |