Norman Macleod, Kt., C.J.
1. His Lordship after setting out the facts proceeded:- It has been contended that a mortgagee of shares is in the same position as a life-tenant, and that any accretion to the mortgaged shares by the issue of fresh capital must be treated as belonging to the corpus but, as pointed out by Lord Herschell in Bouch v. Sproule (1887) 12m App. Cas, 385 that depends on whether accumulated profits are distributed as dividend or converted into capital. If, as in that case, a sum which is entered in the balance sheet to the credit of the Reserve Fund is transferred from the Reserve Fund to the Capital Account and new shares issued to the existing shave-holders, it may be said that there is a distribution of capital and the life-tenant can only get the interest on the new shares, but if the share-holders prefer that instead of getting dividends paid to them in cash, the amount to the credit of profit and loss account available for payment of dividends in a particular year should be transferred to the capital account and new shares issued in respect thereof clearly there is a distribution of dividends, and the life-tenant would be entitled to retain the new sharep. But we have to endeavour to ascertain what was actually decided by the Court which passed the decree.
2. The learned Subordinate Judge in allowing the plaintiff, under the terms of the decree, to redeem the B capital as well has referred to Exhibit 14 (which seems to be a mistake for Exhibit 78) in the suit which was a statement brought in by the defendant of the dividends of the five shares received after Bhadarva 1939. It contains the dividends on the five shares and sub-shares in existence at the date of the mortgage as also of the five shares and five sub-shares of B capital. He deduces from that statement that the defendant did not claim the B capital shares themselves as representing payment of dividends. He also points out that, the mortgagee had always treated the B shares as part of the property mortgaged, and, that when the mortgagor prayed for redemption of the five shares with all the issues thereof up to the date of the suit, no objection was made to the claim by the defendants in their written statement, and as the five mortgaged shares mentioned in the decree clearly included the five A sub-shares without mentioning them, they also must be taken as including the five whole and five half shares of B capital. There is considerable force in this argument. If there was no evidence at all on the record from which it could be deduced that the learned Judge was aware of the issue of the B capital it might be said that the mortgaged shares referred only to A capital, but with Exhibit 78 before him the learned Judge was aware of the B capital and yet throughout the case the mortgaged property is referred to as the five shares. If the defendants when asked to bring1 in an account of the dividends made no claim to include the B shares as representing dividends but only mentioned the dividends on the B shares and if they allowed the mortgaged property to be referred to throughout as the five shares Nos. 5266 to 270, I think it may fairly be assumed that it was so obvious to the Court and to the parties that the B shares were accretions to the A shares that no one thought of taking the precaution of stating that a8 a fact. I should prefer to take this view, than the opposite one, that both parties understood that the B capital should be treated as dividends, be that it was not necessary for the Court to make it clear that only the A capital could be redeemed. I think the appeal should be dismissed with costs.
3. [After setting out the facts of the case, his Lordship went on:-] The defendants have appealed to this Court and it is argued on their behalf that the decree does not refer to these new shares and that the plaintiff is not entitled to them, as the High Court must be deemed to have by necessary implication negatived her claim to them. It is further. urged that the question arising between the parties with reference to these new shires cannot be dealt with in execution; that thee shares represent the dividends of the old shares and not an accretion to capital, Mint they should go to the representatives of Achratlal and Bai Gnlab and not to the plaintiff, and that in any case the plaintiff should pay back the original profits used by the Company in paying up the calls of the new shares.
4. On behalf of the respondent it is urged that the terms of the decree are wide enough to cover these new shares, that the decree should be interpreted in the light of the prayer clause whereby she claimed five shares with all the issues in relation thereto up to the date of suit which would include the new shares of the B capital now in question. It is also urged that the defendants never raised the contention that they were entitled to these shares of the B capital even though they contended that they were entitled to all the profits of the old shares and were in no way liable to account for the same, and that the point must be deemed to have been decided against them by implication. It is also urged on her behalf on merits that these new shares formed an accretion to the capital and that as between the remainderman and the life-tenant, on the expiry of the interest of the life-tenant, the shares must go to the remainderman, according to the principle of the decision in Bouch v. Sproule (1887) 12 App. Cas, 385.
5. As regards the first question relating to the construction of the decree, it is by no means free from difficulty. In the plaint no express reference was made to these shares of 1886 though I the fact must have been known to the plaintiff. In the prayer clause, however, 'the five shares Nos. 266-270 together with the issues thereof that there may be at present' have been referred to. In the written statement the original five shares are referred to, but no contention is raised as to the new shares Bai of the B capital. The judgment of the trial Court is silent and so are the judgments of the High Court on the question. At the same time it may be mentioned that the trustees filed a statement (Exhibit 78) of the dividends received from time to time, in which they showed the dividends received not only on the old shares of the A capital but also on the new shares of the B capital. They, however, did not show the new shares as forming part of the dividends received. The question was not raised on either side and the expression 'mortgaged shares' used in the judgment of the trial Court and the words 'the mortgaged shares together with the issues mentioned in the suit' are not clear enough to place the matter beyond controversy. Having regard to the importance of the point and the absence of any evidence as to whether the shares represented the dividends on the old capital, it is difficult to hold that the decree gave to the plaintiff something, to which no express reference was made in the judgments or in the pleadings, The proceedings in the suit do not throw any light on the meaning of the words used; and the words used in the decree are capable of being interpreted in either sense. The 'mortgaged shares' might include the accretion to the shares: but where the question, whether the new shares were an accretion to the capital, has not been raised and decided on its merits, I do not think that under the terms of the decree the new shares could be held to be included in the expression 'mortgaged shares.'
6. As regards the point that the question must be deemed to have been decided by implication, I do not see how it could be treated as having been decided against the plaintiff. There is some force in a similar contention urge 1 on behalf of the plaintiff against the defendants. Though the new shares were not expressly mentioned in the plaint the words used in the prayer clause were clearly wide enough to include them. The trustees might have, and it may be said with some justice, ought to have, raised the point as to the new shares; and if they did not raise it it must be deemed to have been decided against them. After a careful consideration of the question and taking into consideration the attitude of the trustees as indicated by the statement of accounts filed by them in the suit, T am not satisfied that the effect of the omission on their part to raise the question ought to be pressed against them to the extent of holding that the point must be deemed to have been decided against them by implication. It would be reading the mofuasil pleadings with a strictness which might work injustice and which under the circumstances of this ease I must decliue to do. The question then arises whether the rights of the parties to the new shares could be determined in these proceedings.
7. I think they could be determined. The words of the decree are not unequivocal : and under the circumstances the question whether the new shares are an accretion to the mortgaged property appears to mo to be a question relating to the execution, discharge or satisfaction of the decree. The scope of the inquiry in the execution proceedings must be determined with reference to the terms of Section 47 of the Code of Civil Procedure: but it is not necessary to put any strict construction upon that section, so as to exclude the consideration of a question which seems to be so closely connected with the subject-matter of the decree. Further, under p. 47 it would be open to us to treat the proceeding as a suit, if necessary, under Section 47 subject to the conditions mentioned in that Section 1 do not think, however, that it is necessary to adopt that course in this case.
8. In connection with this question, I must say that the evidence adduced by the parties is meagre. As to the proceedings of the Company, there is a purshis put in by the defendants which gives some information as to the way in which the new capital was raised and the new shares issued. But the difficulty of deciding a question of fact of this nature has been pointed out in various English cases, of which Bouch v. Sproule (1887) 12 App. Case 385 is a type. We have to consider the provisions of the settlement of 1883j and the statement of accounts filed by the trustees.
9. I should have preferred to have the copies of the Articles of Association and of the resolutions of the Company with reference to the B capital and the way in which the calls were made in respect of the new shares. It is needless, however, to delay these proceedings any further: neither party has asked for any further opportunity to adduce evidence on this question.
10. According to the terms of the settlement of 1883 as also on the findings of the High Court in the appeals from the trial Court's decree, it is clear that Achratlal and Bai Gulab had only a life-interest in the old five shares and that ultimately they were to belong to Girdharlal or his heirs subject of course to the mortgage right created subsequently by Girdharlal in favour of Achratlal. Thus all the dividends would go to chratlal and Bai Gulab and the old shares would absolutely belong to the plaintiff after the mortgage amount was paid. The accident of the shares having been transferred to Achratlal as security for the loans makes no difference to the rights of B the parties to the shares apart from the mortgage. It is clear that the old shares carried with them the right to the allotment of the new shares. For instance it is difficult to hold that if the shares had not been mortgaged and transferred to Achratlal and had continued in the name of Girdharlal, the new shares could have been or should have been issued to Achratlal as part of the profits of the old shares, and it is not suggested on behalf of the defendants that in respect of the remaining nineteen shares or such of them as continued in the name of Girdharlal, the trustees of Achratlal have or could have claimed the shares of the new capital B issued to Girdharlal as part of the dividends which were clainiibie by them under the settlement. The right to be allotted the new shares went with the old shares; and I find nothing on the record to support the view that the new shares formed part of the dividends in respect of the old shares. The evidence as to how the calls wore received is not clear; but it seems to me to be a fair inference under the circumstances that the profits of the Company were capitalized and that the new shares were allotted to the holders of the old shares as part of the capital and did not represent the dividends on the old shares. At any rate the trustees have produced no evidence to show that that is not the correct inference. On the contrary their own statement of the profits received shows that the new shares were not treated as part of the dividends received on the old shares. It is very doubtful whether under the terms of the settlement, apart from the mortgage, Bai Gulab could have claimed the dividends on these new shares as part of the dividends on the old shares during her life-time from Girdharlal. The money was advanced to Girdharlal on the security of the old shares; and the new shares, as I understand the effect of the Company's proceedings, were an accretion to the old shares. The title to these shares would follow the title to the old shares: and in my opinion the plaintiff is entitled to claim them. The special resolutions of the 5th September 1888, a printed copy whereof has been produced before us, also show that in substance what the Company did was to capitalize the profits.
11. No doubt the question would arise as to whether there is any equity in favour of the trustees as regards the amount of the shares which but for the capitalisation of the profits the Company might have distributed as dividends on the old shares. The trustees had the benefit of the security afforded by new shares during the continuance of the mortgage: and the question of their right to the profits of these shares as forming part of and going with the profits of the old shares has already been decided in the suit in favour of the trustees. I do not think, therefore, that there is really any equity in their favour; and if the profits were capitalized by the Company, I do not see how the defendants can claim those profits on the footing that if they had not been capitalized they would have been distributed as dividends on the old shares. I do not think that under the circumstances the principle underlying the decision in, Malam v. Eitchens  3 Ch. 578 can apply to this case.
12. I, therefore, concur in the order proposed by my Lord the Chief Justice.