Gilkey v. Paine

• Decision Date: 15 March 1888
• Citation: 14 A. 205,80 Me. 319
• Parties: GILKEY v. PAINE et al.
• Court: Maine Supreme Court

14 A. 205

80 Me. 319

GILKEY

v. PAINE et al.¹

Supreme Judicial Court of Maine.

March 15, 1888.

Bill, answer, and proof, from supreme judicial court, Penobscot county.

Bill in equity brought against the trustees under a will, the plaintiff claiming the right to five shares of the Boston & Albany Railroad Company held by the trustees. The opinion states the facts.

Barker, Vose & Barker, for plaintiff. Albert W. Paine, for defendants.

WALTON, J. On the 18th day of April, 1880, Sylvanus Rich, of Bangor, died leaving a will, giving to trustees 50 shares of the capital stock of the Bosston & Albany Railroad Company, to be held by them for the benefit of the plaintiff (Mary Kate Gilkey, of Bangor) during her natural life, she to have "the net annual income thereof" as fast as it should accrue and be received by the trustees. At the time of the death of Mr. Rich, 24,115 shares of the capital stock of the railroad company were owned by the commonwealth of Massachusetts. But in 1882 the railroad company purchased these shares of the commonwealth, giving in exchange the company's bonds, payable in 20 years, with interest at the rate of 5 per cent. Per annum. Having thus become the owner of these shares, the company voted to distribute, and did distribute, 17,588 of them among its private stockholders, the distribution being at the rate of one share for each ten shares held by the stockholders. Of these shares, the trustees under the will of Mr. Rich received five. They then held, in all, 55 shares, and they have paid to the plaintiff, not only the income on the original 50 shares, but also the income on the additional 5 shares. But this does not satisfy her. She claims that she is not only entitled to the income on these five shares, but to the shares themselves. We do not think this claim can be sustained. These shares are no portion of the "net annual income" to which the plaintiff became entitled under the will. They are now, as they always have been, a portion of the original capital stock of the company. They are not newly-created shares; and they do not represent income. They were not created to represent income, nor were they purchased with income. They were not transferred to the stockholders as a substitute for any of the regular annual dividends of the company. These annual dividends have been paid since, as before, the distribution of these shares; and, so far as appears, they have been for the same amount. And the plaintiff has received, not only her regular dividends on the original 50 shares held by Mr. Rich at the time of his death, but she has also received the dividends on the 5 shares received by the trustees since his death. And there is no reason to doubt that she will continue to receive them in the future. We think she can rightfully claim no more. If these shares had been purchased with the accumulated earnings of the road,—earnings which, but for such purchase, would or might have been distributed to the stockholders as dividends,—a very different case would have been presented. Possibly, they might then be regarded as representing income, and be treated as income. Leland v. Hayden, 102 Mass. 542. But these shares were not so purchased. They were purchased with the bonds of the company,—interest-bearing bonds,—thereby creating a debt of nearly $4,000,000....