C. A. 1907 GENERAL ONTARIO v. 29 O.R. 565. The situs of the bonds in question was foreign: Inland Revenue Commissioners v. Muller & Co.'s Margarine Limited, [1901] A.C. 217, 228-235; Commissioner of Stamps v. Hope, [1891] ATTORNEYA.C. 476, 480, 481; 27 Am. & Eng. Encyc. of Law, 2nd ed., p. 635. If the tax is upon the succession it is indirect, and for that reason also ultra vires, under the British North America Act: Attorney- WOODRUFF. General v. Reed (1884), 10 App. Cas., 141, 143. The legislation is also extra-territorial, and, therefore, not within the sphere of the Ontario Legislature: Macleod v. Attorney-General for New South Wales, [1891] A.C. 455. They referred also to Crossman v. The Queen (1886), 18 Q.B.D. 256; Attorney-General v. Lord Sudeley, [1895] 2 Q.B. 526; Mallott v. Wilson, [1903] 2 Ch. 494; Dicey on Conflict of Laws, last ed., pp. 318-323; Receiver-General v. Schofield (1900), 35 N.B.R. 67; Henty v. The Queen, [1896] A.C. 567; Colquhoun v. Brooks (1889), 14 App. Cas. 493. Frank Ford, for the infant defendants. In the Act as originally drawn, no attempt was made to tax foreign personalty, except where converted and brought into the jurisdiction, and the Act so stood at the date of the death. Section 12 of the Act of 1899 was the result of Re Renfrew, supra. No attempt is made there or in any statute to sweep in foreign property transferred in the lifetime of the deceased. By 1 Edw. VII. ch. 8, sec. 6, a clause was added to clause (a); that would be applicable to this case if there was no actual transfer. If so, that particular part of the statute would be ultra vires. Property transferred in the lifetime of the deceased is not to be taken into consideration in estimating the aggregate value of the estate. See Hanson's Death Duties, pp. 92, 556. The tax is upon the property; not upon the succession. Section 4 is the only taxing section, and that makes it clear that it is only property that is taxed: see also sec. 14. Re Bolster (1905), 10 O.L.R. 591, approving three earlier cases, shews that the ultimate incidence is on the property. The person who pays is the person who takes. See also Inland Revenue Commissioners v. Muller & Co.'s Margarine Limited, [1901] A.C. 217, 223, 228; Hardcastle on Statute Law, 3rd ed., p. 2405; Hanson, p. 271. DuVernet, in reply, referred to Foote's Private International Law, 3rd ed., pp. 298-300; Liquidators of the Maritime Bank v. Receiver-General of New Brunswick, [1892] A.C. 437, 442; Clement on the Canadian Constitution, 2nd ed., p. 251; Lefroy on Legislative Power in Canada, p. 732. C. A. 1907 December 31. GARROW, J.A.:-Appeal by the plaintiff from the judgment, at the trial, of Falconbridge, C.J., in favour of the ATTORNEY- defendants. GENERAL FOR ONTARIO v. WOODRUFF. Garrow, J.A. The action was brought to obtain a declaration that the defendants had wrongfully omitted from the inventory of the estate of the late Samuel D. Woodruff, domiciled at the city of St. Catharines, Ontario, who died on the 28th October, 1904, at St. Catharines, certain assets of his estate, subject to succession duty, and for a judgment for such duty. Three transactions were originally in question, namely, the homestead property in St. Catharines, the settlement of 1894, and that of August, 1902. The testator had in his lifetime executed a conveyance of the homestead to his son the defendant Hamilton K. Woodruff, subject to a life interest in his wife. As to this the Crown succeeds by the judgment now in appeal, but fails as to the settlements. The judgment of the learned Chief Justice proceeds, as I understand it, wholly on the construction of the Succession Duty Act, as it stood at the death of the testator, which he apparently considered insufficient to affect the property covered by the settlements, locally situated as it was at the death outside of this Province. The first settlement was made in the month of January, 1894. The testator at that time had a quantity of bonds or debentures of municipal corporations in the United States, which had always been retained and managed for him in the United States by his agents there. The documents themselves had been kept by the testator in a leased vault of the Mercantile Safe Deposit Company in the city of New York. Desiring to make the settlement, he obtained from the United States Trust Company, carrying on business in New York city, a form of trust deed, which he prepared and had executed in duplicate by his four sons, Alfred S., Hamilton K., Welland DeV., and Thomas A. The trust deeds are all similar in form. The son is in each the party of the first part, and the United States Trust Company is the party of the second part, and the party of the first part thereby, after a short recital stating a desire "to create a trust fund, assigned and set over to the party of the second part for the benefit of the persons thereinafter named, in consideration of the premises and of one dollar of lawful money C. A. 1907 of the United States of America," certain specified bonds, in trust to manage, invest, and re-invest, etc., and, after deducting all proper charges and expenses, to pay over the interest, income, ATTORNEYand profits to the party of the first part during his natural life, and upon his death in trust for his child or children. GENERAL FOR ONTARIO V. Garrow, J.A. With these four deeds executed and in his possession, the WOODRUFF. testator, accompanied by his son Hamilton K., proceeded to New York city. There the securities were obtained by the testator from the safe deposit company's vault and separated into four parcels, containing the securities specifically named and appropriated in the several trust deeds, and these four parcels, with the accompanying and appropriate trust deeds, were then taken to the trust company and delivered to them, where they have ever since remained. The interest on the trust securities has been from time to time remitted by the trustees to the sons, and the sons usually transferred the cheques for such interest to the father, who gave each of the sons back his own cheque for $750, half-yearly, and retained the balance. This, it is said by the sons, was not done in pursuance of any agreement or understanding, expressed or implied, between the father and the sons, but was purely voluntary on their part: a statement which, if it was material, I would, in view of their acts extending over so many years, find it difficult to accept. But for reasons hereinafter appearing the question of fact is not, in my opinion, material. The second settlement was made in the year 1902. The property then settled consisted also of personal property locally situated wholly in the United States. One item was a cash balance owing to the testator of $17,600 by his agents in New York city, and the other items were municipal bonds and debentures of United States corporations of the same character as those included in the first settlement, amounting in all to $443,257. These, too, had never been in this Province, but had always been held and managed for the testator by his agents in New York city. The bonds and debentures were also kept in the vault of the same safe deposit company, of which vault the testator kept the key. When about to make this settlement, the testator wrote to Shepard & Co., his agents, a letter, dated the 31st July, 1902, in which he said: "I hereby authorize you to transfer my account from my name to that of Alfred S. Woodruff, Hamilton K. Woodruff, and Welland C. A. 1907 FOR ONTARIO V. D. Woodruff, jointly. I wish to have my affairs in good shape, as I have not been feeling very well of late." And on the following ATTORNEY- 5th August he executed an instrument, not under seal, addressed GENERAL to and executed by his four sons, Alfred S., Hamilton K., Welland D., and Thomas A., in which he expressed that he handed over WOODRUFF. to them all his personal property outside of St. Catharines, in trust for his wife, the defendant Jane C. Woodruff, and after her death to be divided equally between the four sons, subject to the payment of $2,500 for the education of each of two named grandchildren. This settlement was made and executed at St. Catharines, where the testator, his wife; and all the sons but Thomas resided. Thomas, at the time of both settlements, was a resident of the city of Chicago, in the United States, where he still resides. Garrow, J.A. This document was followed a few days later by a more formal one, which enumerates the several securities. Pursuant to the letter of the 31st July, Shepard & Co. transferred the current account to the three named sons (Thomas was not included), and notified the testator and them that he had done so. The vault in the safe deposit company's premises where the securities were kept, to which by the lease the testator, or his wife, or his son Hamilton, or his son Alfred, had access, was, under instructions from the testator in a letter to the safe deposit company, dated the 23rd August, 1902, let or otherwise so arranged that in future access to it could only be secured by the sons Alfred, Hamilton, and Welland (Thomas again omitted), and their mother, Jane Caroline Woodruff, and thereafter the annual receipts for the rent of the vault were given in the name of the mother. several matters constitute the second settlement. And these So far as appears, no remittance of income to Ontario was ever made by the New York agents under the second settlement, nor other definite action of any kind taken by the trustees to realize or get in the trust property in the lifetime of the testator. By the second settlement the testator had parted with practically all his estate, yet he continued to be assessed down to his death, without appealing, for the large sum of $15,000 for income. He also continued to occupy, with his wife, the homestead, although he had conveyed it to his son in the month of January, 1894, retaining, however, the conveyance in his safe. He had executed his will dated the 18th January, 1896, disposing with great par C. A. 1907 ticularity of an apparently large estate, and on the 7th January, 1903, after both settlements had been made, he made a codicil to his will, merely altering the fifth clause, a comparatively trifling ATTORNEYGENERAL bequest of his household effects, horses, cows, carriages, etc. The executors named in the will are the three sons, Alfred, Hamilton, and Welland, to whom the bank account in New York was transferred. The testator was born in the month of March, 1819, and was, therefore, a very old man at his death. He had had a stroke of paralysis in the month of May, 1898, from which he never fully recovered, and he died from the effects of a second stroke. Under all these circumstances, the proper inference of fact as to the second settlement is either that it was made in contemplation of the death of the testator, or was made or intended to take effect in possession or enjoyment only after his death. The remaining question is, does the Act apply to both or to either settlement? The Succession Duty Act, R.S.O. 1897, ch. 24, as amended by 62 Vict. (2) ch. 9, 1 Edw. VII. ch. 8, and 2 Edw. VII. ch. 12, sec. 6, provides, so far as the present inquiry is concerned, that the Act shall apply to the estates of persons dying on or after the 1st July, 1892, unless otherwise expressed. The word "property" (sec. 2) shall include real and personal property of every description. Then follow certain exemptions; after these, by sec. 4 (1), it is enacted that the following property shall be subject to a succession duty to be paid for the use of the Province, over and above the fees payable under the Surrogate Courts Act:-(a) All property situate within this Province whether the deceased person owning or entitled thereto was domiciled in Ontario or not; and all movable or personal property locally situate out of this Province and any interest therein where the owner was domiciled in this Province at the time of his death, whether such property passes by will or intestacy; (b) all property situate as aforesaid which shall be voluntarily transferred . . in contemplation of the death of the grantor... or made or intended to take effect in possession or enjoyment after such death; (c) property taken under any gift, whenever made, of which property bonâ fide possession and enjoyment shall not have been assumed by the donee immediately upon the any . . FOR ONTARIO V. WOODRUFF. Garrow, J.A. |