Boyer v. Chauncey, 12 Pa. Super. 526

Boyer v. Chauncey

12 Pa. Super. 526 | Pa. Super. Ct. | 1900

Opinion by

Rice, P. J.,

This estate is held by the appellant in trust to pay over the net income thereof .to the appellee during her life, and on her death to convey and transfer the principal to her child or children or the issue of such child or children who may be then living, and if she shall die without issue then to her brothers and sisters. The will creating the trust further provided as follows: “ The proceeds of any sales of real and personal estate sold by her executors .... I direct to be invested .... and held for the purposes of my will, in such stocks, loans or securities as he or they may deem most advantageous without regard to whether such investments shall be such as would without this power be sanctioned by the courts having jurisdiction of the accounts of my executors.” After the date when this trust became operative the appellant bought as an investment five pericent first mortgage gold bonds of the Equitable Illuminating Gas Company, amounting to $2,000 on their face, for which he paid a premium amounting to $58.05. In his second account stated on May 1, 1899, he charged himself with the total income received from December 13,1896, to date, and took credit for the premium paid on the above investment. Other questions were raised in the court below, but the sole subject of review on this appeal is the disallowance by the court of this credit.

It is frankly conceded by the appellant and his counsel that the entire premium could not be deducted at once from the income. The unreasonableness of permitting that is so clearly ■shown in the opinion of Judge Penrose in Furness’s Estate, 12 Phila. 130, quoted in the opinion filed in the present case, as to render it unnecessary to say anything further upon that point.

*533But it is contended that such an annual proportionate deduction should be made from the income as would, if continued until the end of the term of the securities, make up the loss of premium sure then to occur. Even conceding the correctness of this proposition it would be impossible to determine what deduction ought to be made from the income for the years covered by this account without knowing the term for which the securities in question are to run. And, although we have examined the paper-hooks with considerable care, we cannot find that this fact appears anywhere in the record. We are not disposed, however, to dismiss the case upon this ground, and in the view we take of the case the omission of this fact from the evidence is immaterial. An obvious objection to the rule as above stated is that if the term of the security, is long, and the life tenancy of short duration it must often happen that at the expiration of the latter the security will be worth as much as was paid for it. In such cases no loss of principal will have occurred, and hence no just reason for holding that the interest received from the investment in the mean time Avas not the true net income. It comes then to this, may the trustee Avithhold, either absolutely or conditionally, part of the income to make good a diminution of principal, which, possibly, but not certainly, may occur at the expiration of the life tenancy? We recognize the importance of the question and are not rash enough to assert that the arguments in support of the appellant’s contention are without force. But upon a full and deliberate consideration of the matter we conclude with the court below that, under the will which created this trust there can be no withholding of income to meet apprehended loss of principal which may .never occur. Irrespective of the question of the applicability of the statute against accumulations, this seems to us the better view, and the conclusion more likely to effectuate the true intent of the testator than that contended for by the appellant. We can add nothing profitably to the discussion contained in the opinion of the learned judge of the court below and in the authorities referred to and discussed in his opinion.

The decree is affirmed.