Briscoe, J.,

delivered the opinion of the Court.

The object of the proceedings in this case is to obtain a construction of certain clauses of the last will and testament, of John Quinn, late of Baltimore City, deceased. The appeal is from a decree of the Circuit Court No. 2, of Baltimore City, passed in a special case stated, under the 47th General Equity Rule of that Court.

John Quinn, the testator died on the 7th of December, 1899, leaving a last will and testament, which was duly admitted to probate in the Orphans’ Court of Baltimore City. By the third clause of his will he provided (among other things) as. follows: “I give, devise and bequeath all the rest and residue of my property, real, personal and mixed of every kind and description and wheresoever situate, unto the Safe Deposit and Trust Company of Baltimore, a body corporate, duly incorporated under the laws of the State of Maryland, in trust and confidence nevertheless, that is to say, in trust to hold the same and take, collect and receive the dividend and income thereof and, after deducting the necessary and proper costs and expenses, to pay over out of the net income of my said estate, the sum of twelve hundred dollars per year to my wife, Mary Quinn, for and during the period after my death that she may remain unmarried, and if she shall not marry, then for and durng the term of her natural life, to be drawn by her in such *293 sums as she may desire and at such time as she may see fit, and also to permit my said wife to have for her home during her life or as long as she may remain unmarried, my present dwelling and all furniture and personal effects contained therein; and upon her death and marriage, which ever shall first occur, then this trust to cease so far as relates to her, and upon the further trust to pay the entire net income arising from my estate, (after deducting the sum of twelve hundred dollars payable as aforesaid unto my said wife, Mary Quinn, during the period she shall remain unmarried, and if she should not marry, then for and during the term of her natural life), annually among my children share and share alike, for and during the term of their respective natural lives, and when each of my children shall arrive at the age of forty-five years, I direct that he or she shall be paid the sum of five thousand dollars out of the principal of my estate, and I will and direct that the income set apart for my said children shall be paid only upon the personal and separate receipt of each of my said children, or of their legal guardian or guardians, so that neither the said income nor the said sum of five thousand dollars payable to each of my said children shall be liable for their debts or contracts or to be taken in execution or attachment however, and so that they nor any of them shall not make any assignment or anticipation of said income or sum of money to be given them. If my said sons or daughters, or either of them, should die, then the part or portion of such decedents shall be paid to the respective legal heirs of such decedent or decedents, subject to the conditions and limitations herein contained as to the manner of payment and taking of receipt for such income.

“And I hereby direct that this trust shall cease upon the death of my last surviving child, when my property shall be divided, per stirpes, and not per capita, among the descendants of my said children.”

The testator left surviving him a widow and six children. The widow is now living and is unmarried, and all of the children are now living.

There is no dispute as to the facts of the case, and the ques *294 tions under the special case stated relate solely to the disposition of certain dividends. declared since the testator’s death, upon four hundred shares of the capital stock of the Canton Company of Baltimore, owned by the testator at the time of his death, and which are now held by the trustee. •

It is contended upon the part of the appellants; the children of the testator, that the whole of the dividend on the shares of stock of the Canton Company should be paid to them as net income, share and share alike, as life-tenants, under the third clause of the testator’s will.

The appellee on the other hand contends that only the accumulations which accrued subsequent to the death of the testator constitute net income, which is to be paid to the children, and the trustee is to receive, as capital,- that part of the $4,000 which fell due during the life' of the testator.

The Court below decreed, under the facts of the case stated: First. That the whole of‘the net amount of the dividend on 400 shares of the capital stock of the Canton Company of Baltimore belonging to the said trust estate and mentioned in the proceedings, to wit: $4,000 less the commissions of the trustee, is not to be and shall not be paid as income to and among the children of the said testator share and share alike; and second, that the sum of $ 186.00 mentioned in paragraph 13 of the case stated (out of the total dividend of $4,000 which has been declared and paid upon and in respect to the said 400 shares of stock), less the commission of the trustees on the said sum,-is to be and shall be paid to the children of the testator, to wit: Mary Quinn, Agnes Quinn, Joseph E. Quinn, Augustin Quinn, Paul J. Quinn and Peter Quinn, and shall be equally divided among them; and the residue of the net amount of the said dividend is- to be and shall be retained by the Safe Deposit and Trust Company of Baltimore (after payment thereout of the costs and expenses mentioned in paragraph fourth of this decree), as a part of-all the rest and residue of the testator’s property which he gave, devised and bequeathed to it as trustee in and by clause third of his last will and testament.

*295 It is from this decree that the appellants have appealed.

The facts of the case bearing upon the question of the declaration of the dividend are stated in the record to be as follows :

(1) “The following appears from the report of the President and Directors of the Canton Company of Báltimore of June 13th, 1900, viz.: “On May 1st, 1900, the second mortgage of the Union Railroad became due, and under an agreement with the Canton Company, this mortgage was paid off by the Northern Central Railway Company, leaving the sinking fund which has been amassed for the protection of this mortgage, the property of your company.” “The directors at their meeting in February decided to declare a dividend from these proceeds of $10 per share, which had been done. The remainder of the sinking fund is invested in ground rents on the company’s property and some cash. It has been decided by your board of directors that the ground rents, which represent a very handsome investment, shall be retained, and the rents accruing therefrom shall be put to our income account, which will enable us to increase our dividends.”

(2) The resolution declaring said dividend was passed February 14th, 1900, and is as follows :

“Whereas, a sinking fund of the Union Railroad Company matures on the 1st day of May next amounting to about $600,000, which consists of both cash and ground rents,

“Be it.therefore voted—

“That the cash on hand and received for Union Railroad bonds shall be. distributed to the stockholders of record on the first of May to the amount of ten ($10) dollars per share as a dividend, and the balance of cash and the ground rents take th,e course which has been heretofore adopted as the policy of the company.”

The question here presented is an interesting one and is not free from difficulty. The rule of law controlling questions such as are now presented is thus stated by the English Courts, in the case of Bouch v. Sproule, L. R. 12 App. Cases, 385 : “When a testator or settlor directs or permits the sub *296 ject of his disposition to remain as shares or stocks in a company which has the power either of distributing its profits as dividends or of converting them into capital and the company validly exercises this power, such exercise of its power is binding on all persons interested under him the testator or settlor, in the shares, and, consequently what is paid by the company as dividend goes to the tenant for life and what is paid by the company to the shareholder as capital, pr appropriated as an increase of the capital stock in the concern, enures to the benefit of all who are interested in the capital. In a word what the company says is income shall be income and what it says is capital shall be capital.”

In Gibbons v. Mahon, 136 U. S. 559, the Supreme Court, in an elaborate discussion of this question, says: “When a distribution of earnings is made by a corporation among its stockholders, the question whether such distribütion is an apportionment of additional stock representing capital or a division of profits and income, depends upon the substance and intent of the action of the corporation, as manifested by its vote or resolution and ordinarily a dividend declared in stock is to be deemed capital, and a dividend in money is to be deemed income of each share.” The same principle is maintained in Bates v. MacKinley, 31 Beavan, 280; Van Doren v. Oldin, 4 N. J. R. Eq. 176; Richardson v. Richardson, 75 Maine 570.

Such then being the present state of the law upon this question, and applying it to the case now before us, we think the Court below committed an error in apportioning the dividend, under the facts and circumstances of this case, between the time of the testator’s death and its declaration by the Canton Company, but should have directed the whole of the $4,000 dividend to have been paid to the testator’s children, the life-tenants, less expenses of administering the trust.

But it has been urged upon the part of the appellee that this case falls within the principle established by this Court in the recent case of Thomas et al. v. Gregg et al., 78 Md. 560, and that that case is conclusive of the present controversy. The present case we do not think is like that of Thomas v. *297 Gregg, supra, where a dividend of twenty (20) per cent was declared upon the common stock of the B. & O. R. R. Company for the period ending September 30th, 1891, payable on and after 31st day of December, 1891, in common stock of the company, at the office of the treasurer, to the stockholders of record, on the 30th of November, 1891. In that case it was held, that “as the earnings for the year ending September 30th, 1889, can be easily told and that was before the life-estate commenced, it was but just and in accordance with the intention of the testator, so far as it is shown, that such earnings be treated as capital.” The facts of the present case, are very different. The sinking fund in this case which was created under the deed, dated April 25th, 1873, was a special fund, and held by the trustees for the purpose of paying at maturity the bonds of the Union Railroad Company, which were endorsed by the Canton Company. By a subsequent agreement, dated on February 14, 1882, the Northern Central Railway Company agreed to pay the interest on the bonds of the Union Railroad Company, and also the principal of the said bonds at their maturity, and on the 1st of May, 1900, actually paid these bonds. By reason of this payment the sinking fund became the property of the Canton Company and to be disposed of by that company for the best interest of those interested. Subsequently, at a meeting of the directors of the company, on the 14th of February, 1900, it was declared by resolution, what part of this fund should be carried to capital, and what portion should be distributed as a dividend to the stockholders. It will also be seen that the fund constituting the sinking fund, had been held by the trustees for the purpose of paying the bonds at their maturity, and had not been capitalized, as was the fund in the case of Thomas v. Gregg, supra. It was paid to the Canton Company, as its property, and was distributed by it, after the death of the testator, Quinn.

We find nothing in the case of Thomas v. Gregg in conflict with the conclusion which we have reached in this case.

The directors of the Canton Company determined by resolution passed on February 14th, 1900, how and in what manner *298 this fund should be distributed, and their discretion in this respect, having been properly and validly exercised, should not be interfered with nor controlled by the Courts. New York, Lake Erie & Western, R. R. v. Nickols, 119 U. S. 296; Gibbons v. Mahon, 136 U. S. 558.

(Decided April 10th, 1901.)

For these reasons, and under the special facts and circumstances of this case, we are all of the opinion, that the whole $4,000 dividend, less commissions is to be paid to the testator’s children, share and share alike. It therefore follows that the decree of the Court below will be reversed and the cause remanded so that a decree may> be passed in accordance with the views herein expressed.

Decree reyet'sed and cause remanded, with costs.