MARY ELIZABETH WOOD Vs. GERALD ALLAN WOOD

JUDGEMENT

(1.) Mary G. Wood made her will, dated 29 November 1923. By it she bequeathed pecuniary legacies amounting in all to $9,000; she bequeathed three life annuities of $400 each; she made bequests of common capital stock of the Bank of Nova Scotia amounting in all to 125 shares therein; she made a specific bequest of 15 shares in the Canada Cement Company to her niece Helen Carvolth; she made a specific bequest of chattels to her sister Charlotte Edwards, and a specific bequest of her shares in the Ottawa Transportation Co., Ltd. to her son Gerald A. Wood; and after specific devises of real estate, her will concluded as follows : All the rest residue and remainder of my estate real and personal which I am seized or possessed of or entitled to or over which I have any power of appointment I give, devise and bequeath as to one half thereof to my son Gerald A. Wood and as to one half thereof to the children of my deceased son James Russell Wood to be divided equally between them per stirpes and to be paid to them as they respectively attain the age of 21 years, the share of any of the said last mentioned children who shall die before receiving his or her share and without leaving issue him or her surviving to be divided equally between his or her surviving brother and sister or sisters as the case may be.

(2.) And I appoint my said son Gerald A. Wood and my said sister Charlotte Isabella Edwards executor and executrix of this my will. By a codicil of the same date she directed that the provision in favour of the children of her deceased son should be accumulated as to income until they attained the age of 25 years respectively and should be distributed and paid to them as to both capital and income when they respectively attained the age of 25 years. The testatrix died on 24 February 1924 and her will and codicil were proved in the Surrogate Court of the County of Peterborough, Ontario, on 27 March, 1924 by the defendant and the said Charlotte Isabella Edwards. There were three children of her said deceased son who survived the testatrix, viz. the plaintiffs to the action hereinafter mentioned, the eldest being 11 years old when the testatrix died. Their mother had in the year 1922 been appointed their guardian by the Surrogate Court. The personal estate of the testatrix at her death consisted (in addition to the personal and household effects specifically bequeathed) of (1) cash in banks, (2) a mortgage debt, (3) Government bonds with accrued interest, and (4) shares in the Bank of Nova Scotia, the Bank of Commerce, the Ottawa Transportation Company, and the Canada Cement Company. These last named shares were 500 in number, of which 15 were specifically bequeathed to Miss Carvolth and 485 fell into residue.

(3.) In view of the terms of the will the task of the executors was free from complication. They had merely to realize so much of the estate as was necessary for the purpose, and to pay thereout the debts and funeral and testamentary expenses, and pecuniary legacies; to set aside sufficient funds to provide for the annuities; and to transfer and hand over to the specific legatees their legacies of shares and chattels. The residue remaining of the personal estate of the testatrix would then constitute the ascertained residue and would be divisible into moieties, one half of each investment being the absolute property of the said Gerald A. Wood, who was the defendant to the said action, and the other half would form part of the infants' moiety. Any securities forming part of the infants' moiety which were not trust investments would either have to be sold and the proceeds properly invested, or else retained under the direction of the Court. If the executors chose neither to sell nor to obtain the Court's direction, any retention would be at their risk. Instead of pursuing this course, the executors appear to have done little during the executors' year beyond paying creditors and making payments to the annuitants. From the account of disbursements (Ex. B) brought in by the defendant in the Surrogate Court as hereinafter mentioned, it would appear that none of the legacies were paid or satisfied until after the expiration of the year. Miss Charlotte Edwards died on 24th November 1928, leaving the defendant sole executor. In the mon May, 1935 the defendant applied to the Surrogate Court to have his accounts as executor audited and passed. His accounts as brought in showed himself to have taken over as part of his moiety of the residuary estate, the 485 shares in the Canada Cement Company at the value of $102 per share. The item appears in the accounts as a sale to him by the executors at that price on 24 February 1925. The shares were in fact sold by the executors in the month of December 1927, at the price of $250 per share. On this item being challenged the Surrogate directed an issue "as to the items in dispute,"but instead of any issue being tried in the Surrogate Court an action was instituted in the Supreme Court of Ontario on 31 August 1935, by the three children of James Russell Wood, against the said Gerald A. Wood as sole defendant.