5 Misc. 2d 87 | N.Y. Sur. Ct. | 1956
In paragraph Second of his will Henry B. Johnson bequeathed $10,000 to his wife Augusta Johnson “ In trust to invest and reinvest the same and to pay the income thereof to my said wife, Augusta Johnson, during the term of her natural life ”. Upon her death the remainder was to pass to two cemeteries. Mrs. Johnson was named executrix and in compliance with court order she filed a bond in the sum of $10,000 to secure delivery of the principal of the gift in paragraph Second to her successors in interest, before letters testamentary were issued. As executrix she assigned to herself as “ trustee ” a one-half interest in a $20,000 bond and mortgage in satisfaction of this bequest and made the transfer subject to liability for allocable estate taxes. Letters of trusteeship were never issued to Mrs. Johnson who died in 1953. Her executor is accounting for her life estate in the $10,000 which he has entitled a trust account and to which the remaindermen have filed objections. There is no objection to the two companion accounts submitted by the executor as the representative of the deceased executrix and as administrator c. t. a., respectively, of the Henry B. Johnson estate.
All of the remaining objections relate to the extent and nature of the liability for the expenses of administering the gift in paragraph Second. Henry B. Johnson’s attempt to create a trust with Mrs. Johnson as sole trustee and sole life beneficiary was ineffectual and she held a legal life estate with the same incidents of tenure as if the bequest had taken that form (Real Property Law, § 92; Matter of Reed v. Browne, 295 N. Y. 184; Rose v. Hatch, 125 N. Y. 427). Contending that neither the life tenant nor her executor is entitled to commission, the object-ants dispute the amounts set forth in schedule “ JJ ” as payable to the estate of Augusta Johnson, “ deceased trustee ” and to the accountant as “ executor of deceased trustee.” Concededly the statute governing trustees’ commissions (Surrogate’s Ct. Act, § 285-a) does not in terms authorize such payments to a legal life tenant. A life tenant of personal property who takes possession of the corpus has often been called a trustee for the remainderman (Matter of Reckford, 307 N. Y. 165,170; Peck v. Smith, 227 N. Y. 228, 232; Matter of Smith, 170 Misc. 556; see Surrogate’s Ct. Act, § 314, subd. 6). Like a trustee he may be compelled to account (Surrogate’s Ct. Act, § 261-a; Matter of Olstein, 51 N. Y. S. 2d 770; Matter of Smith, supra); to furnish a bond as a condition precedent of possession (Surrogate’s Ct. Act, § 169-a; Matter of Wind, 1 Misc 2d 260) and to confine his exercise of the power to invest the principal within the limits imposed upon trustees (Matter of Krom, 86 N. Y. S. 2d 628; see Matter of Bunker, 183 Misc. 523; but cf. Matter of Raplee, 160 Misc. 615).
Although the holder of a life estate is managing property in which other parties have an interest and is therefore a trustee in a general sense, the courts have recognized that “ A life tenant is not a trustee in the sense in which that term is used in courts of equity and in the statute ” (Matter of Flynn, 73 N. Y. S. 2d 408, 411; Matter of Yulee, 199 Misc. 440; 1 American Law of Property, § 2.27). The rule that a testamentary provision exempting “ my trustee ” from bond will not be construed as a direction that the nominated individual serve without bond when the “ trustee ” is held to be a life tenant
Different factors bear upon the issue of the right of Mrs. Johnson’s executor to the commissions stated in schedule “ JJ ”. Section 261-a of article 14 of the Surrogate’s Court Act provides : ‘ ‘ Every right granted by this article to or against a testamentary trustee and the legal representatives of a deceased testamentary trustee * * * shall apply to a similar proceeding by or against a legal life tenant and by or against the legal representatives of a deceased legal life tenant ”. The article referred to contains section 257 which authorizes an accounting by the legal representative of a deceased testamentary trustee and gives the Surrogate discretion to “ allow to the accounting party reasonable compensation for any service rendered by him to the estate accounted for.” The section governing trustees’ commissions is in a subsequent article not made applicable to life tenants by section 261-a. Through the conduit of section 261-a the obligation to account, imposed upon
The other items of expense in dispute are listed in schedule “ CC ”. The remaindermen do not deny that the $50 appraisal expense was incurred in an attempt to comply with their request
Submit decree on notice settling these accounts accordingly. Upon the submission of an affidavit of services the court will also fix the attorney’s fees claimed in schedule “ COO ” of the account of the administrator c. t. a. of the estate of Henry B. Johnson.