107 N.Y.S. 864 | N.Y. App. Div. | 1907
The action was brought to have the will of Edward M. Brown, deceased, judicially construed. Two questions only are presented by the appellant for review. The able opinion of the learned referee disposes of all others raised on the trial satisfactorily to the parties. 'The first is whether the' profits on capital left invested in the business of a fruit auction copartnership firm, of which decedent was a member, by express permission contained in the will, belongs to principal or income, and the other is whether the appointment of Adelaide E. Brown, the widow of the decedent, as trustee of an express trust, she being a beneficiary, was valid.
The firm, name of the copartnership was Brown & Seccomb. The decedent appointed his brother and wife his executor and executrix and authorized them to leave or invest $75,000 “ as a special capital and interest in the firm,” to remain “ invested as a special partnership interest in said firm,” for the term of five years after his death,. “ provided such firm and such business shall be continued by my partners for that'length of time, and that said firm shall agree to pay to my said Executors or Estate, interest and income thereupon at the rate of six per cent per annum on said capital, and in addition- thereto, the sum of ten thousand dollars ($10,000) annually, for the period of five years, for the good will
Stress is laid upon the finding that the good will was worth more than the price fixed therefor by the testator. There is nothing to give rise to the inference of bad faith, or an attempt on the part of the executors to procure for one of them — the life tenant — an advantage at the expense of the remaindermen. The testator fixed the price that his surviving partners should pay for the good will, and in the absence of bad faith, fraud or collusion, the remaindermen cannot complain that the executors sold pn the terms he prescribed. The argument that on this construction the business might be very profitable at the outset, and yet after the life tenant realizes many times the interest on the principal invested, it might fail, resulting in a loss to the' remaindermen, is answered by the authority of the testator to invest in the partnership business which' necessarily sub
The learned counsel for the appellant contends that the life tenant, who in the first instance receives all of the income, is incompetent to act as trustee. If "this were so, its effect upon the decision under review is not stated. Assuming the trustee to be incompetent, as claimed, that would not invalidate the trust. There has been no motion to remove the trustee, or to have a substituted trustee appointed. If the theory be that it renders the agreement with the surviving partners void, we are unable to agree with that view. In any event, the other executor was competent to make the agreement, and the mere fact that the life tenant joined in it would not invalidate it. Moreover, the testator expressly authorized her to act in the premises. With knowledge that she might have an interest adverse to that of the remaindermen, he vested discretion in her to act with her co-executor, and until en joined or removed, she is competent to act. It may well be that he fixed the prices to be charged the surviving partner for the good will in order that she might have no interest adverse to the interests of the remaindermen. She is not trustee and beneficiary of the same interest. She, with her co-executor, held the legal title to the $75,000, the same as to the rest of the estate, in trust to invest and preserve for the remainder-men. Income, while in the hands of her co-executor, would be held in trust for her, but upon reaching her hands from any source the trust with respect thereto ceased and it became her individual property, subject only to the obligation to apply it in part to the support of her daughter.
It follows that the judgment should be affirmed, with costs.
Patterson, P. J., Houghton, Scott and Lambert, JJ., concurred.
Judgment affirmed, with costs.