183 Mass. 581 | Mass. | 1903
This is a bill for instructions by trustees appointed under the will of James Edwards. By the will he gave all his property to these trustees, stating the trust as follows : “To invest and reinvest the same at their discretion, in such securities as the laws of this Commonwealth allow savings banks to invest their funds in, and the whole net income therefrom shall be paid to my said wife as long as she shall live, for her own use and disposal, with the exception that I direct that from said income there shall be paid monthly to my son, William Edwards, and his wife, Alice J. Edwards, in equal shares, the sum of one hundred dollars, as long as my said wife shall live.” At the death of his wife the trustees are to pay the income to his children and to the wife of one of them, and at the termination of the trust, to pay over the remainder to his grandchildren or to his heirs at law. The value of the personal property that came into the hands of the trustees was nearly $70,000, and the value of the real estate was more than $200,000. Much of the personal property that he left was stock carried by brokers on margins, and the most valuable part of the real estate was unproductive land on Huntington Avenue which was appraised in the executor’s inventory, filed November 11, 1896, at $150,000, and in the trustees’ inventory, filed December 31, 1898, at $155,000, and was sold by the trustees on September 1, 1899, for $196,500. The question relates to the apportionment of income and principal between the life tenant and the remaindermen, from the proceeds of the sale of the land on Huntington
The question raised by this bill for instructions relates only to the proceeds of the sale of the land on Huntington Avenue. The life tenant, the widow of the testator, is one of the trustees who bring the suit, and in the bill she states her claim as follows: “ The widow of the testator, who with the annuitants, is entitled to the income of the trust fund from the time of the testator’s death to the filing of this bill, claims that she is entitled to receive a proportionate part of the proceeds of the sale of said Huntington Avenue land, as the income of that part of the trust estate, and contends that all the taxes, assessments and brokers’ commissions, which the trustees and executors have paid, and are bound to pay, should be charged to the funds received from said sale, and that the fund should then be so divided as to constitute a fund at the time of the testator’s death, which, with interest at a reasonable rate, to wit, four per cent, will produce the amount for which the said estate was sold, less the expenses accruing on the same, and all betterments against said premises which the trustees are bound to pay, and that then she is entitled to said interest or income, and that the fund determined as aforesaid shall form a part of the corpus of the estate.” The question arises whether, in apportioning the principal and income, we are to assume that the fund, if established at the time of the testator’s death, would have earned income at the rate of six per cent per annum, or only at some lower rate. It was said at the argument, and we suppose it to be a fact of common knowledge, that a fund invested in such securities as savings banks may invest in under our laws, cannot be made to produce an income of nearly so much as six per cent per annum, and the life tenant, in stating her claim, suggests the allowance of “ interest at a reasonable rate, to wit, four per cent.” In this statement she recognizes the principle that in this case we are not to deal with interest as an allowance made by law to represent damages for the failure to pay money when
In Westcott v. Nickerson, ubi supra, it is said that the amount obtained “ is to be distributed between the tenant for life and the remainderman, by computing what sum, if received at the death of the testator, adding interest at six per cent with annual rests, would produce the amount afterwards actually received . . . and by investing the original sum, so computed, as principal, and distributing the residue as income.” In Kinmonth v. Brigham, ubi supra, a direction is given in similar language. But in neither of these cases was any consideration given to the possible difference between the income actually obtainable and the rate of interest prescribed by law. The first of these cases was decided in 1876, and the other in November, 1862, and at the time to which the decisions relate there was little if any difference between the usual earnings of capital and the rate of interest established by law. Neither the parties nor the court had any occasion to consider the question now raised.
We are of opinion that the case should be'referred to a master to ascertain what sum would have been sufficient if invested by the trustees immediately after the death of the testator, to produce, with the income which they reasonably could have ob
So ordered.