97 N.J. Eq. 169 | N.J. Ct. of Ch. | 1924
In this case the complainants, who are life tenants, seek a part of the $200,000 proceeds of sale of two hundred shares of common stock of Irvington Varnish and Insulator Company as income.
These shares were part of the estate of Carl Berger, who died in 1920. In his will Berger directed payment of his debts and specific devises and bequests, and then said that all the rest, residue and remainder of his estate, "including my stock, both common and preferred, in said Irvington *170 Varnish and Insulator Company," be given to his executors and trustees in trust. He divided the corpus into two equal funds for his two children, with directions "to invest, reinvest and keep invested each of said funds in good and safe securities, retaining, so long as may be deemed advisable the stock, both common and preferred, above named, hereby fully protecting said trustee and each of them against any and all personal liability whatsoever, by virtue of such retention," then to pay the net income from the fund to his children for life. In paragraph seven of his will he suggests "none of my common stock in the Irvington Varnish and Insulator Company shall be sold or disposed of, unless, in the unanimous judgment of my executors and trustees, the survivors or survivor of them it is essential to the best interests of my estate to sell and dispose of the same."
From the time of testator's death on June 15th, 1920, to the date of the sale on March 10th, 1922, the common stock paid no dividends.
The complainants, children of the testator, insist that they are entitled to part of the $200,000 as income, because they received no dividends on the common stock from the testator's death to the date of the sale.
The executors and trustees insist that the entire $200,000 iscorpus.
It should be noted that there is no direction by the testator to convert, nor did his will contemplate immediate conversion of the common stock on his death into any other form of investment.
The rule in these cases is laid down in 1 Lew. Trusts 303, as follows:
"Where at the death of the testator the property is not in the state in which it is directed to be, the tenant for life is, before the conversion, entitled to a reasonable fruit of the property from the death of the testator to the time of conversion, whether made in the course of the year or subsequently."
Complainant has cited several cases. Lawrence v.Littlefield,
These cases, it seems to me, hold that an apportionment shall be made between life tenant and remaindermen when there is an imperative direction to sell, or where the terms of the will worked a conversion as of the time of the testator's death.
In the case at bar, Mr. Berger did not direct the immediate sale of his stock, but provided, on the contrary, that the executors should retain the common and preferred stock as long as they might deem it advisable.
In Martin v. Kimball,
See, also, case of Outcalt v. Appleby,
In McCoy v. McCloskey,
I shall therefore find that the entire $200,000 should be treated as corpus, and should not be distributed as income andcorpus.