Osborne rule in New York

1994At that time, the allocation of stock dividends was controlled by the Osborne rule (Matter of Osborne, 209 NY 450 ) which required a complex apportionment between income and principal based upon the origin of the underlying corporate surplus.

1994At that time, the allocation of stock dividends was controlled by the Osborne rule (Matter of Osborne, 209 NY 450 ) which required a complex apportionment between income and principal based upon the origin of the underlying corporate surplus.

1965Therefore, the entire stock distribution must be credited wholly to principal (Matter of Payne [Bingham), supra; Matter of Lissberger, supra) unless it appears that earned surplus or accumulated earnings was the source of the distribution.

1965Therefore, the entire stock distribution must be credited wholly to principal (Matter of Payne [Bingham), supra; Matter of Lissberger, supra) unless it appears that earned surplus or accumulated earnings was the source of the distribution.

1958As has been said by another court in relation to the very distribution by General Electric now before us: “ From the foregoing and the wealth of authoritative decisions cited it is readily seen that it (has) been uniformly held that a declaration of dividend such as was made by the General Electric [Company] can only be construed and determined to be a stock dividend.” (Matter of Sanford, 4 Misc 2d 487, 496 , supra.) The cases cited by appellants which deal with the Osborne rule (Matter of Osborne, 209 N. Y. 450 ) and what preceded and followed it, are not persuasive of any other conclusion an

1958As has been said by another court in relation to the very distribution by General Electric now before us: “ From the foregoing and the wealth of authoritative decisions cited it is readily seen that it (has) been uniformly held that a declaration of dividend such as was made by the General Electric [Company] can only be construed and determined to be a stock dividend.” (Matter of Sanford, 4 Misc 2d 487, 496 , supra.) The cases cited by appellants which deal with the Osborne rule (Matter of Osborne, 209 N. Y. 450 ) and what preceded and followed it, are not persuasive of any other conclusion an

1976In attempting to apply the rule and apportionment decreed in Matter of Fosdick ( 4 NY2d 646 , supra), a trust case, to this case involving a legal life estate, objectant seems to concede that at least in some respects there are no reasons for different rules between such legal life estates and trusts insofar as income and principal are concerned.

1976In attempting to apply the rule and apportionment decreed in Matter of Fosdick ( 4 NY2d 646 , supra), a trust case, to this case involving a legal life estate, objectant seems to concede that at least in some respects there are no reasons for different rules between such legal life estates and trusts insofar as income and principal are concerned.

1976The Court of Appeals (Matter of Payne [Bingham], 7 NY2d 1, 8 ) hinted that possibly the Osborne rule might be reconsidered in a proper case to determine whether it should be repudiated or restricted as done by the courts and Legislatures in other jurisdictions.

1976The Court of Appeals (Matter of Payne [Bingham], 7 NY2d 1, 8 ) hinted that possibly the Osborne rule might be reconsidered in a proper case to determine whether it should be repudiated or restricted as done by the courts and Legislatures in other jurisdictions.

1969(Matter of Schaefer, 155 Misc. 850 [Surrogate’s Ct., N. Y.

1969(Matter of Schaefer, 155 Misc. 850 [Surrogate’s Ct., N. Y.

1959(See Pratt v. Ladd, 253 N. Y. 213 .) So settled was the rule thought to be that no appeal of the identical issue present herein was even argued in our court in the Pratt case.

1959(See Pratt v. Ladd, 253 N. Y. 213 .) So settled was the rule thought to be that no appeal of the identical issue present herein was even argued in our court in the Pratt case.

1959Moreover, in Equitable Trust Co. v. Prentice ( 250 N. Y. 1 ), Chief Judge Cabdozo undertook to explain the Osborne rule (see quotation, infra).

1959Moreover, in Equitable Trust Co. v. Prentice ( 250 N. Y. 1 ), Chief Judge Cabdozo undertook to explain the Osborne rule (see quotation, infra).

1959(Cf. Matter of Lissberger, 189 Misc. 277 , affd. 273 App. Div. 881 , motion for leave to appeal denied 298 N. Y. 934 ; Matter of Hagen, 262 N. Y. 301, 304 , supra.) Accepting, as we do, the prevailing view that a transfer from capital surplus to the capital stock account does not constitute a capitalization or distribution of earnings when that transfer represents 100% of the capitalization accompanying a stock distribution, it necessarily follows that we may not treat such a transfer as a capitalization of earnings simply because, as in the present case, it represents less than 100%.

1959(Cf. Matter of Lissberger, 189 Misc. 277 , affd. 273 App. Div. 881 , motion for leave to appeal denied 298 N. Y. 934 ; Matter of Hagen, 262 N. Y. 301, 304 , supra.) Accepting, as we do, the prevailing view that a transfer from capital surplus to the capital stock account does not constitute a capitalization or distribution of earnings when that transfer represents 100% of the capitalization accompanying a stock distribution, it necessarily follows that we may not treat such a transfer as a capitalization of earnings simply because, as in the present case, it represents less than 100%.

1959(See, e.g., 3 Scott, Trusts [2d ed., 1956], § 236.3, pp. 1816-1817; Restatement, Trusts [Supp. 1948], § 236; Bowles v. Stilley’s Ex’r., 267 S. W. 2d 707 [Ky.]; Langdell v. Dodge, 100 N. H. 118; Cunningham Estate, 395 Pa. 1 ; see, also, Matter of Lindsay, 11 Misc 2d 374 .) Our sole task is to determine whether the Osborne rule, fairly applied, required the trustee to allocate to the income beneficiary more stock than it had. ' The appellants claim, in effect, that, because some earnings were transferred to the capital stock account in each case, the entire accompanying increase in the number of

1959(See, e.g., 3 Scott, Trusts [2d ed., 1956], § 236.3, pp. 1816-1817; Restatement, Trusts [Supp. 1948], § 236; Bowles v. Stilley’s Ex’r., 267 S. W. 2d 707 [Ky.]; Langdell v. Dodge, 100 N. H. 118; Cunningham Estate, 395 Pa. 1 ; see, also, Matter of Lindsay, 11 Misc 2d 374 .) Our sole task is to determine whether the Osborne rule, fairly applied, required the trustee to allocate to the income beneficiary more stock than it had. ' The appellants claim, in effect, that, because some earnings were transferred to the capital stock account in each case, the entire accompanying increase in the number of

1959(See, e.g., 3 Scott, Trusts [2d ed., 1956], § 236.3, pp. 1816-1817; Restatement, Trusts [Supp. 1948], § 236; Bowles v. Stilley’s Ex’r., 267 S. W. 2d 707 [Ky.]; Langdell v. Dodge, 100 N. H. 118; Cunningham Estate, 395 Pa. 1 ; see, also, Matter of Lindsay, 11 Misc 2d 374 .) Our sole task is to determine whether the Osborne rule, fairly applied, required the trustee to allocate to the income beneficiary more stock than it had. ' The appellants claim, in effect, that, because some earnings were transferred to the capital stock account in each case, the entire accompanying increase in the number of

1959(See, e.g., 3 Scott, Trusts [2d ed., 1956], § 236.3, pp. 1816-1817; Restatement, Trusts [Supp. 1948], § 236; Bowles v. Stilley’s Ex’r., 267 S. W. 2d 707 [Ky.]; Langdell v. Dodge, 100 N. H. 118; Cunningham Estate, 395 Pa. 1 ; see, also, Matter of Lindsay, 11 Misc 2d 374 .) Our sole task is to determine whether the Osborne rule, fairly applied, required the trustee to allocate to the income beneficiary more stock than it had. ' The appellants claim, in effect, that, because some earnings were transferred to the capital stock account in each case, the entire accompanying increase in the number of

1959(Cf. Matter of Lissberger, 189 Misc. 277 , affd. 273 App. Div. 881 , motion for leave to appeal denied 298 N. Y. 934 ; Matter of Hagen, 262 N. Y. 301, 304 , supra.) Accepting, as we do, the prevailing view that a transfer from capital surplus to the capital stock account does not constitute a capitalization or distribution of earnings when that transfer represents 100% of the capitalization accompanying a stock distribution, it necessarily follows that we may not treat such a transfer as a capitalization of earnings simply because, as in the present case, it represents less than 100%.

1959(Cf. Matter of Lissberger, 189 Misc. 277 , affd. 273 App. Div. 881 , motion for leave to appeal denied 298 N. Y. 934 ; Matter of Hagen, 262 N. Y. 301, 304 , supra.) Accepting, as we do, the prevailing view that a transfer from capital surplus to the capital stock account does not constitute a capitalization or distribution of earnings when that transfer represents 100% of the capitalization accompanying a stock distribution, it necessarily follows that we may not treat such a transfer as a capitalization of earnings simply because, as in the present case, it represents less than 100%.