New York Court of Appeals
Arthur K. Bourne, as Trustees Under the Will of Frederick G. Bourne, Deceased, Respondents v. Arthur K…
May 5, 1925240 N.Y. 172
Summary
The Court affirmed the lower court's allocation of an extraordinary stock dividend of the Singer Manufacturing Company to the remaindermen, holding that no portion should go to the life tenants because the capital and surplus of the corporation decreased after the dividend. It also affirmed the allocation of a subsidiary stock dividend to capital. The Court declined to re‑evaluate the directors' good‑faith valuations of corporate assets. Justice Hiscock dissented, arguing that the life tenants should share in the dividend representing earnings after the trust's creation.