The Roanoke times. [volume] (Roanoke, Va.) 1890-1895, 1892-12-10


special accounts opened under the
Scneme were mere bookkeeping entries
rms If shown by the reports, and par
tlcularly by the report of 1889.
In that year the special ABSORPTION
iund and Improvement fund were closed
oy the directors, who stated in their
report that, the object contemplated
when those fluids were established hav-
ing been accomplished by this retiring
OF all the series save q, ard in tho es-
taolishment Of q fund su tIicient for all
prooaole wants OF the company for bot.
ceument or development it was in the
Judgment of the directors, unnecessary
tc continue in tho future this mode Of
ook'keeping." and that tho balance of
the special absorption fund had been
transferred to the special profit and loss
account. In the accounts tor 1889. and.
indeed, In all the accounts after the
testator's death, as we'll as before, the
amount OF the capital stccll' for tho
limo oeing IS distinctly shown. In the
report Tor 1889 it is shown as .'SlCO. 600.
series c." the other series HAVING boen
redeemed, with n triGing exception. bv
non presentation, and in anoth her part Of
the report + is stated that tho total
amount OF dividends and interest paid
was $3.50, las and that tho total amount
OF capital stock redeemed was 5000. ono.
leaving 100000 capital stock outstand-
ing,
1t was added that this outstanding
stock was represented by tho companys
assets, which might reasonably be as
sumed to be worth $500. S21 But this
statement was not = Capitalization of
the wnolo OF these assets The object
was morcly to show that tho assets re-
naming wero far moro than sufficient
10 answer the outstanding capital stock.
Again, in 1890, the Especial profit and
loss account" was closed, and the bal
ance. as is shown by the report for that
year' carried to the general profit and
loss account. In the same report the
capital stock, series G., is stated to be-
Slu,0o0' and there is q statement similar
to that in tho report Of 1859, showing
how this outstanding capital stock Of
$4,000 was represented by assets. The
report oil 1890, after setting forth divi-
oenos PAID since organization aud the
amounts paid in redemption OF stock,
states that from tho above it will be
seen that, should the remaining assets
Of the company ESTIMATED at S532, 307l
be disposed OF a. the valuations SGT forth,
the stockholders will have received
their original capital OF S4OO, 900 and, in
addition, dividends amounting to $751;
455.
In tho general balance. sh st as OF De-
cember 81, 1891, the capital stock,
series e." again appears a. $40. 600 only,
ana tho amount OF the Improvement
fund is S60,4l4 and OF tho profit and loss
account $241.4l0. There is note in tho
report OF 1890 which statos that the
capital Of the company was originally
500, 900, which was subsequently, in
creased to 5000, 600, and finally to $780,
900. There are similar notes in other
reports. can find no snfilciens ground
for saying that the company has capital
lied its proHss, whether divided or un-
divided. In these cases between tenant
for life and the persons entitled in rc-
malnder thero is material distinction
between companies wbicu have and
those which have not power 10 increase
their capital.
This distinction was prominently
brought out by tho present Lord Chau-
cel!or in "Bouch v. Sproule" ne App.
Ca, 3s5, 1881 in the statement of his
opinion that, where company has
power to increase is capital and TIC.
appropriate is profits to such increase,
it cannot DO considered as having in
tended to convert, or having converted,
any parts OF Its profits to capital when
it has made no such Increase even If a
company having no power to increase
It's capital may be regarded As having
thus converted profits into capital by
the accumulation and uso OF them as
such" Further, in these cases the de-
cision OF tho company setting within tao
scope of It's constitution binds the per-
sons Interested in succession TO tho
testator's shares, and determines what
Is capital and what is income.
In "Bouch V. Sproulo %. l0N, Lord
Watson said that where the company
has n 6ntarpnipn NJ
reserved and temporarily devoted to cap
ital purposes shall be- Distributed as
dividend or permanently added TO its
capital, tho interest OF tho tenant for
life depends, in his opinion, on tho de-
cision OF tho company IL i evident
from this, and, iudeci, IL is plain tia.
tho decision required SO 20 bind is a
tina! decision for the parnanent add.
ton OF the previous profits TO the CON
pany's capital, and that i nero with
drawal o. portion OF profits from i'm
mediate division and temporary devo-
ton TO capital purposes will not suffice.
Tho result, in my opinion, is that, as
between the ton,nt Tor life and the per-
sons entitled in remainder, the testators
capital must be deemed TO DO tho pur
value OF his sharoS-v!z, 81, 500, ard
that the rest OF the sums paid or pay
able by tho company must be treated as
income. or the sums. amounting to
eS74 lis. Cd, received by tho trustees
in 1891. no part was, as I understand the
facts, specifically appropriated to tho
redemption OF the testator's remaining
capital; and, subject to this observation,
the whole OF this sum belongs to the
tenant for life. The trustees, | appre-
bend, can readily make any necessary
readjustment in their accounts in con-
formity with my decision. The costs
will come out OF the capital OF tho resid-
uary trust estate.