290 Mass. 385 | Mass. | 1935
This is an appeal from a decree allowing an account of a trustee. The relevant facts are not in dispute: The testatrix after some minor bequests gave her entire estate to the accountant in trust with the direction that “ the net income from my estate shall be paid quarterly by the said trustee to my husband," George H. Williams, during the natural term of his life.” The will contains no directions as to the amortization of premiums on investments. The accountant received from the executor numerous bonds owned by the testatrix in her lifetime. They were appraised in the inventory of the executor and that of the accountant at a premium above their par value. The accountant made amortization charges against interest received on these bonds. The main question argued is whether these amortization charges were proper.
In Old Colony Trust Co. v. Comstock, ante, 377, the decision in New England Trust Co. v. Eaton, 140 Mass. 532, has been reaffirmed to the effect that amortization of bonds purchased by the trustee at a premium was proper. That is not the exact point presented in the case at
This is the settled rule in this Commonwealth. It is supported by the fact that the testatrix who made the investments left them to the trustee with directions to pay the net income to the one having the first natural claim on her bounty. It is inferable that there was no intention to diminish that net income of specific investments for the benefit of more remote beneficiaries. While the distinction between investments left by the founder of the trust and those subsequently made by the trustees in the management of the trust is not too wide in logic, it has been made, it has become our rule, and has support in reason. This appears to be a widely accepted principle. McLouth v. Hunt, 154 N. Y. 179, 190, 191, 192. Robertson v. de Brulatour, 188 N. Y. 301, 315. Connecticut Trust & Safe Deposit Company’s Appeal, 80 Conn. 540, 544-545. Higgins v. Beck, 116 Maine, 127, 132-133. It follows that there was error in the decree to the extent that amortization charges were allowed.
Decree reversed.