Ganong v. Belyea

Ganong v. Belyea

The Court held the shares vested in the legatees on the testatrix's death; undeclared and unpaid dividends could not be treated as 'accrued due' because dividends require profits and a directors' declaration; the codicil's reservation could not lawfully or reasonably be interpreted to withhold transfer indefinitely and thus the attempted indefinite withholding/charge was void for uncertainty (or at most limited to dividends actually paid to the executors within one year); accordingly legatees were entitled to delivery of the shares and the reservation failed to prevent transfer.

Citation
[1941] SCR 125
Parties
Appellants (legatees): Arthur D. Ganong and others; Respondents (residuary Legatees): Jeannette R. Belyea and another; Respondent (executor and Trustee): Executor and Trustee (Eastern Trust Company / estate executor)
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
20 December 1940
Procedural Posture
Appeal From Supreme Court of New Brunswick, Appeal Division / Supreme Court of Canada Judgment on Appeal (final Disposition)
Outcome
Appeal allowed; judgment of Baxter C.J. restored; legatees entitled to delivery of shares.
Legal Topics
Will Construction, Vesting of Legacies, Dividends and Corporate Declaration, Condition Precedent and Uncertainty, Charges on Bequeathed Property, Delivery of Shares
Source Language
English
Estates Wills Trusts Property Law Taxation (succession Duties) Will Construction Vesting of Legacies Dividends and Corporate Declaration +3 more

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Parties

Arthur D. Ganong and others

Appellants (legatees)

Jeannette R. Belyea and another

Respondents (residuary Legatees)

Executor and Trustee (Eastern Trust Company / estate executor)

Respondent (executor and Trustee)

Procedural Posture

Appeal From Supreme Court of New Brunswick, Appeal Division / Supreme Court of Canada Judgment on Appeal (final Disposition)

Legal Issues

  1. 1 Did the specific share bequests vest on testatrix's death?
  2. 2 Did dividends described in the codicil 'accrued due' despite no profits or declaration by directors?
  3. 3 Did the codicil create a valid charge on the shares or beneficiaries for two years' dividends?

Ratio Decidendi

The Court held the shares vested in the legatees on the testatrix's death; undeclared and unpaid dividends could not be treated as 'accrued due' because dividends require profits and a directors' declaration; the codicil's reservation could not lawfully or reasonably be interpreted to withhold transfer indefinitely and thus the attempted indefinite withholding/charge was void for uncertainty (or at most limited to dividends actually paid to the executors within one year); accordingly legatees were entitled to delivery of the shares and the reservation failed to prevent transfer.

Court Disposition

Appeal allowed; judgment of Baxter C.J. restored; legatees entitled to delivery of shares.

Orders

  • Appeal allowed and judgment of Baxter C.J. restored
  • Specific legatees entitled to delivery of the bequeathed preferred and common shares (no restraining charge for undeclared dividends)