Cairns v. Chaubert

9 Paige Ch. 160 | New York Court of Chancery | 1841

The Chancellor.

The counsel for both parties in this case appear to have acted upon the supposition that Mrs. Chaubért was entitled to the whole income of the bridge property ; in the same manner as if the testator had made a specific bequest of the rents and tolls of this particular portion of his property to her for life, with remainder to others for the residue of the term for which the franchise of taking tolls was to continue; unconnected with the general residuary bequest of all his property to her for life, after payment of debts, with remainders therein to others after her death. Upon that supposition it was clearly wrong to allow the executrix to expend upon this property, the capital of which was constantly decreasing by the efflux of time, other portions of the personal estate, in which the interests of the owners of the successive life estates therein and of the ultimate remaindermen in fee was entirely different. For, as the counsel of the appellant correctly remarks, if Mrs. Chaubert should continue to live until the charter of the bridge and the term for years in the toll house and barn lot expires, the appellant would lose the whole of the personal estate which had been laid out in improvements upon that property. And the result would be the same to the children of Mrs. Cairns, and their descendants, if their mother should survive the first tenant for life and outlive the continuance of this term of twenty-nine years.

Both parties are wrong, however, in supposing that the widow was entitled to the whole income of the bridge property in the situation in which it was at the time of the tes tutor’s death ; instead of the interest or income of the capital which that part of his property would have produced by an actual sale thereof, and the investment of the proceeds of such sale in permanent securities. As the bridge was not in existence, nor in the contemplation of the testator, at the time of making his will, two years before the passage of the act of the legislature authorizing him to build it, upon no principle of construction can this be considered as a specific bequest of successive life estates, to his wife and to Mrs. Cairns, in this particular property, ^(a) The case, therefore, falls within the general principle that where an estate for life, or any other interest short of the absolute ownership, is given in the general residue of the testator’s personal estate, terms for years, and other perishable funds or property which may be consumed in the using, are to be converted and invested in such a way as to produce a permanent capital; the income or interest of which permanent capital alone is to go to the owner of the life estate, or other particular estate in the testator’s residuary personal property. (See How v. Earl of Portsmouth, 7 Vesey’s Rep. 137. Feams v. Young, 9 Idem, 549. Covenhoven v. Shuler, 2 Paige’s Rep. 122. 2 Will. Law of Ex’rs, 859.) The expenditure in completing the toll house and barn may therefore be considered as properly expended upon this portion of the personal estate ; to carry into effect the intention of the testator. The bridge and franchise, including the improvements upon the toll house and barn and the leasehold property, should be valued together at what they were worth in cash immediately after the testator’s death; and the executrix should be allowed the interest on that amount, out of the tolls or income exclusive of taxes, for life, or until the property is actually sold. And the residue of the income must be accounted for by her, and added to the capital of the fund and accumulated ; so as to place those who are interested in the remainder in the same situation as if the bridge property and the expenditures thereon had been sold and converted into a permanent capital within the year after the death of the testator. This part of the decree of the surrogate must be modified accordingly, by restating that part of the account on these principles. And to prevent a confusion in the accounts between the owner of the second life estate and the remaindermen, in this part of the testator’s personal estate, it may be proper for the surrogate to direct it to be sold and the proceeds to be invested in permanent securities.

The surrogate was right in allowing the executrix the $500 paid to Clark for his services in settling the estate j as it appears by the testimony to have been a proper disbursement, and such as was allowed by this court in the cases of McWhorter v. Benson, (Hopk. Rep. 28,) and Vanderheyden v. Vanderheyden, (2 Paige's Rep. 287.) That part of the decree must therefore be affirmed.

The decree was also right in allowing to the executrix commissions upon the bonds and mortgages which were valid and collectable ¿ and which were assigned to the trust company, with the assent of the surrogate and the appellants, as permanent securities for the benefit of the remaindermen. This money was, in legal effect, received and paid over for the purposes of the trust. The executrix was not, however, entitled to commissions on the $10,000 at which the bridge property was inventoried, until it had been actually sold and the money invested for the purposes of the trust. For if she died leaving that property unsold, it would be necessary that a new personal representative of the testator should be appointed to perform that part of the trust, before the property could be converted into money and distributed to the legatees entitled thereto according to the directions of the will. The commissions, to that extent, must be disallowed.

As neither party has wholly succeeded upon this appeal, I shall not allow costs to either as against the other.. And the proceedings are to be remitted to the surrogate to restate the account in conformity with this decision.

(a) See Pickering v. Pickering, 4 Mylne & Craig's Chancery Reports, 289.