The power of legislation to effect a disturbance in the bequeathment of company shares, provides the footing of a claim against ademption when a testator’s wishes fall victim to the dissolution of an established utility company.
Having taken the steps to leave a specific legacy to his sister in a will drafted little over year before his death, the testator expressed that:
“To Catherine Pontin Slater I bequeath the interest during her life arising from money invested in the following…Lambeth Waterworks Company.”
Unfortunately, eleven months after his declaration had been formalised, Lambeth Waterworks Company was acquired by Metropolitan Water Board under the powers provided for in the Metropolis Water Act 1902, whereupon shareholders were issued Metropolitan stock to the same values as before.
At the point of death, the executors challenged under summons, the existence of the new shares on principle that despite their reassignment, the Lambeth Waterworks Company shares were equally visible, despite the change of form preceding the will’s completion.
The first court disagreed, and referred to the principle of ademption under section 24 of the Wills Act 1837 which reads:
“[E]very Will shall be construed, with reference to the Real Estate and Personal Estate comprised in it, to speak and take effect as if it had been executed immediately before the Death of the Testator, unless a contrary Intention shall appear by the Will.”
This translated that despite the previous reference to Lambeth Waterworks Company and the resulting transferral from Lambeth stock to Metropolitan stock, there could be no correlation between the two sources, other than by the nature of their business.
Upon rejection of the claim, the executors appealed, whereupon the Court considered recent cases, that while supportive in their construction, offered little to uphold a challenge to the clarity provided for by the 1837 Act.
It was for this simple reason that the Court dismissed the appeal and allowed for the shares to lapse into the residual estate, while the court reminded the parties that:
“[Y]ou have to ask yourself, Where is the thing which is given? If you cannot find it at the testator’s death, it is no use trying to trace it unless you can trace it in this sense, that you find something which has been changed in name and form only, but which is substantially the same thing.”