22 N.J. Eq. 44 | New York Court of Chancery | 1871
By an order made by written consent of parties, it was referred to a master to report t-lie interest due to the petitioner, on the sum of $40,000, directed to be held in trust
He has computed interest at the rate of seven per cent, during that part of the time in which the executors received dividends at that rate, on the par value of these shares. The exceptants contend that it should be allowed at that rate only when the dividends amounted to seven per cent, on the real value of the shares in which the estate was invested. The only question is upon the meaning of the order, or rather of the agreement between the parties, for that order is only an agreement put in the form of an order, and I cannot go back of it and look into the equity of the case, or real rights of the parties.
The “ money belonging to the petitioner,” to use the words of the order, was at that time in the shares of the company, and the dividends upon those shares was the only interest
The next exception is to the mode of computing interest by yearly rests, so as to charge compound interest. As the will gives the fund set aside, with its increase from accumulation, it must be hold to direct the executor to accumulate, which can only be done by putting it at interest. And where the fund is so largo, and the time for holding it in trust is so long, as in this case, this direction must be held to apply to the interest as well as the principal. And without regard to this direction, a trustee would not be permitted to allow amounts of interest so large as those received in this case, to lie idle for years uninvested. The master was right in calculating interest by yearly rests.
M. Cr. Colt, the acting executor, excepts to the report on the ground that the master has not allowed commissions on the principal of this legacy. And the petitioner excepts, because the master has allowed commissions on the income paid the petitioner since he arrived at twenty-one.
As far as can be gathered from the report, and the account annexed, for they are not explicit or very clear on this point, the master has allowed commissions at the rate of two and a half per cent., as against E. L. Colt, junior, on the income paid to him, but has not charged it upon the principal of the legacy. E. L. Colt, junior, excepts because he is charged with this commission on the income. The executor excepts, because E. L. Colt, junior, is not charged with the commis
It seems to me that both questions depend upon the construction of the last clause of the codicil. That directs that the executor “ shall charge a commission of two and a half per cent, on the sums he shall pay out of the trust created for the support and education of my said three grandchildren.” The testator directed in his will that $10,000 should be paid out of his estate to his executor, for his services as acting executor and trustee of his will. In the will he gave to the three children of his deceased son, Roswell, of whom R. L. Colt, junior, is one, an equal fourth part of his whole estate, to be equally divided between them, and directed the income to be applied to their support and education, until of age, and then the income of the share of each to be paid to him during his natural life, and the principal on his death to his lawful issue; and directed that his acting executor should be allowed a commission of five per cent, on the yearly income of said share, until disposed of as directed. The provision in the will only allows a commission on the income; it is confined to that by the words. I think the words of the codicil confine the commission to the income, even without reference to the provision on the same subject in the will. >
In the codicil the provision is, “ that after my said grandson, R. L. Colt, junior, shall arrive at the age of twenty-one years, the whole yearly income of said $40,000 shall be paid to him until he arrive at the age of twenty-five years, if he shall live so long; and, in the mean time, that he be well educated and properly supported, out of the income he derives from his father’s estate, and from the interest of this conditional bequest.”
The trust of the principal was created by the direction to hold $40,000 for the benefit of his grandson, to be paid to him when he arrived at the age of twenty-five years, with the increase from accumulation. This clearly was not a trust created for his “support and education.” On that alone is
The question raised by the exception of E. L. Colt, junior,. is whether the commission which the executor is clearly entitled to charge on the income expended for education and support while under twenty-one, should be charged against, the legacy and deducted from it, or whether it should come out of the estate and fall upon the residuary legatees.
In all cases where the will contains no directions as to commissions or expenses of administration, specific legacies, and bequests of specified sums, are not charged with them, but are paid in full, and the expenses and commissions are taken from the residue, or such assets as are not disposed of. A gift of $40,000, or the income of $40,000, would entitle the legatee to the exact amount, without any deduction, if the estate is not exhausted. A testator can charge such legacy, with its proportion of commissions, and other expenses, but for this his directions must be explicit and clear.
In this case, the direction is simply that the executor shall be paid a commission “ on the sums he shall pay,” not out of the sums that he shall pay. There are some reasons for •conjecturing that his intention was or might have boon that these commissions should be charged to these grandchildren, and not that they should be paid “ out of his estate,” as he directed the $10,000 to be paid. But these reasons are not, in my judgment, sufficient to overturn the well settled rule, as against these grandchildren, who receive far less than the fourth part of the estate which would have come to their father by an equal division. I do not feel justified in further .reducing their shares, without a more clear declaration of his
Another question submitted for my determination, by agreement .of the parties, is, whether the amount due for the funeral expenses of Margaret' Colt, a granddaughter of the testator,, and the physician’s bill in her last illness, can be ordered to be paid out of the estate of the testator, there being no estate of her own out of which these expenses can be paid. She was under the age of,., eighteen years at her death, in September, 1866. The income of $20,000, directed to be held in trust for her, had, by order of the court, been expended in her education and support, except $789, which was the increase by accumulation. The testator directed, if Margaret should die without issue under twenty-five, that the sum of $20,000 given to her, with the accumulation thereon, bé added to his general estate, and considered as part thereof. That estate’ he gave to three of his children then living. This gift included this sum of $20,000, and the accumulation on it.
But as the direction was that Margaret should be educated and supported out of this income until she was eighteen, she was entitled to have the whole of the income expended for such support, and there could be no accumulation in the sense in which that word is used in the will, as long as the physician’s. bill, or any expenses for her in her lifetime, remain unpaid. The medical expensés unpaid, I understand, exceed the surplus of $789, and of course that must be applied to these expenses. And in case they did not absorb the whole amount, I have no hesitation in including her funeral expenses in this provision for her support and maintenance.
But the principal was not subject to her support and maintenance in case of her dying under twenty-five. It was given over, and the title to the remainder was vested in the legatees to whom it was so given.
If a father does not sufficiently provide for the support of a child, or one to whom he stands Hn loco parentis, the
The case of Coomes v. Elling, in 3 Atk. 676, which was urged on the argument as a precedent for funeral expenses, was only as to the orphanage share of the daughter of a freeman of the city of London ; this was preserved to her by the custom of London against the will of her father, and by the same custom, on her death under twenty-one went to her brother, and could not be bequeathed, like her other property, by a will executed when over seventeen. It was held that this share went to her brother, liable to her debts and funeral expenses, and that, being property as to which she died intestate, it was, in accordance with the settled rules of administration, liable to them, before the property as to which her will was valid, or the legatory property, as it is called in the report. By the custom, a freeman can bequeath one-third of his effects; one-third goes to his widow, and one-third to his children; and John Coomes, the free
Had Margaret Colt, at her death, owned absolutely assets which, by reason of her infancy, she could not have bequeathed, these assets would have been liable to her funeral éxpenses. This is all that is decided in Coomes v. Elling.