Ronald v. Williams

Ronald v. Williams

A general direction that the executor 'shall invest in such securities as he may deem advisable' does not authorize retention or investment in unauthorized securities; under the rule in Howe v. Lord Dartmouth, unauthorized investments are treated as capital for the benefit of residuary beneficiaries and the life tenant is not entitled to income from such unauthorized investments; therefore the executor had no power to retain or invest in the contested company shares and the returns were capital for the residuary legatees.

Citation
[1949] SCR 446
Parties
Appellants Executor and Executrix of the Estate of Cora Bell Lennox (deceased): William Sidney Ronald and Beatrice Avis Ainley Cels; Respondents Residuary Beneficiaries: Lennox Arthur Williams and Helen Marguerite Fuller
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
9 May 1949
Procedural Posture
Wills and Estates Appeal / Appeal to Supreme Court of Canada From the Court of Appeal for Manitoba
Outcome
Appeal dismissed with costs; cross-appeal dismissed without costs
Legal Topics
Life Tenancy, Residuary Estate, Trustee Investment Powers, Conversion Rule, Unauthorized Investments, Construction of Wills, Trustees' Duties
Source Language
English
Estates Trusts Wills Equity Life Tenancy Residuary Estate Trustee Investment Powers Conversion Rule +3 more

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Parties

William Sidney Ronald and Beatrice Avis Ainley Cels

Appellants Executor and Executrix of the Estate of Cora Bell Lennox (deceased)

Lennox Arthur Williams and Helen Marguerite Fuller

Respondents Residuary Beneficiaries

Procedural Posture

Wills and Estates Appeal / Appeal to Supreme Court of Canada From the Court of Appeal for Manitoba

Legal Issues

  1. 1 Whether executor under the will had power to retain or invest in unauthorized securities
  2. 2 Whether income from unauthorized investments belongs to the life tenant or to residuary beneficiaries
  3. 3 Construction of the clause authorizing investment 'in such securities as he may deem advisable' and whether it authorizes unauthorized investments

Ratio Decidendi

A general direction that the executor 'shall invest in such securities as he may deem advisable' does not authorize retention or investment in unauthorized securities; under the rule in Howe v. Lord Dartmouth, unauthorized investments are treated as capital for the benefit of residuary beneficiaries and the life tenant is not entitled to income from such unauthorized investments; therefore the executor had no power to retain or invest in the contested company shares and the returns were capital for the residuary legatees.

Court Disposition

Appeal dismissed with costs; cross-appeal dismissed without costs

Orders

  • Appeal dismissed with costs; cross-appeal dismissed without costs
  • Order of the Court of Appeal varied to restrict valuation in clause (1) to the 75 shares of T. Sisman Shoe Co. Ltd. (including all earnings and undistributed or undeclared accretions) attributable to the estate