Halifax School for the Blind v. Chipman / In re estate of Thomas E. Kelly, deceased

Halifax School for the Blind v. Chipman / In re estate of Thomas E. Kelly, deceased

The appeal is dismissed because the will, taken as a whole, clearly manifests the testator’s intention to create and preserve capital endowments in the hands of perpetually-succeeded trustees and to give the charity income only; the rule allowing an absolute income beneficiary to demand corpus does not apply where the testator has clearly indicated a contrary intention to keep the corpus invested and under trustee control.

Citation
[1937] SCR 196
Parties
Appellant (charitable Beneficiary): Halifax School for the Blind; Respondents (trustees): Lewis Chipman and Others, Trustees under the will of Thomas E. Kelley, Deceased; Deceased (testator): Thomas E. Kelley
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
19 March 1937
Procedural Posture
Appeal / On Appeal From the Supreme Court of Nova Scotia in Banco to the Supreme Court of Canada
Outcome
Appeal dismissed; judgment of the Supreme Court of Nova Scotia in banco affirmed
Legal Topics
Construction of Will, Entitlement to Corpus Vs Income, Rule in Saunders V. Vautier, Perpetuity and Charitable Trusts, Cy Près Doctrine
Source Language
English
Estates Trusts Wills Charities Construction of Will Entitlement to Corpus Vs Income Rule in Saunders V. Vautier Perpetuity and Charitable Trusts +1 more

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Parties

Halifax School for the Blind

Appellant (charitable Beneficiary)

Lewis Chipman and Others, Trustees under the will of Thomas E. Kelley, Deceased

Respondents (trustees)

Thomas E. Kelley

Deceased (testator)

Procedural Posture

Appeal / On Appeal From the Supreme Court of Nova Scotia in Banco to the Supreme Court of Canada

Legal Issues

  1. 1 Whether a charitable income beneficiary entitled to receive corpus by terminating the trust where will directs trustees to pay net annual income to that charity
  2. 2 Whether rule in Saunders v. Vautier (and Wharton v. Masterman) applies to require transfer of corpus to a charity receiving income in perpetuity
  3. 3 Construction of testator's intention where will provides for perpetual trusteeship and specified investment/remuneration provisions

Ratio Decidendi

The appeal is dismissed because the will, taken as a whole, clearly manifests the testator’s intention to create and preserve capital endowments in the hands of perpetually-succeeded trustees and to give the charity income only; the rule allowing an absolute income beneficiary to demand corpus does not apply where the testator has clearly indicated a contrary intention to keep the corpus invested and under trustee control.

Court Disposition

Appeal dismissed; judgment of the Supreme Court of Nova Scotia in banco affirmed

Orders

  • Appeal dismissed
  • Each party to pay its own costs