105 N.Y.S. 925 | N.Y. Sur. Ct. | 1907
The above-entitled proceedings were instituted by Esther Menzie, life beneficiary under the will of George W. Menzie, deceased, by the filing of a petition September 8, 1906, asking that George L. Menzie, testamentary trustee under the will of said decedent, be required to make and file and proceed to an accounting and judicial settlement of his accounts as such trustee. Hpon such petition, the said trustee was directed to
On December first, thereafter, Esther Menzie, the beneficiary under the will of the said decedent, filed an answer to such petition and account, in and by which she challenges the good faith of the trustee in the management of the estate, in which she has a life interest, and objects to certain items of expenditure with which he has credited himself in his said account, in and by which the income of the said estate was materially depreciated, to her loss as such beneficiary.
The contestant and beneficiary derives her interest in the estate under the will of her deceased husband, which will is dated June 2, 1881, and duly admitted to probate before the Surrogate’s Court of Madison county on the 2d day of September, 1882. The portion of said will, necessary for consideration here, is as follows:
“ Second. I give and devise to my beloved wife Esther the dwelling house and lot now occupied by me as a residence in the village of Canastota, N. Y., together with all the appurtenances thereto belonging for and during the term of her natural life, the buildings to be kept insured and in good repair by her; and from and after her death I give and devise the said house and lot to my two sons George LeRoy Menzie and John W. Menzie and to their heirs and assigns forever share 'and share alike. I also give and bequeath to my said wife the use and enjoyment during her life of my black walnut book-caSe and the books therein contained, the large gilt parlor looking-glass, the marble top sideboard and the marble top black walnut bedroom set of furniture consisting of bedstead, dressing bureau and washstand—I also give and bequeath to my said wife and to her heirs and assigns forever all the rest, residue and remainder of*137 my household furniture and utensils including beds, bedding, pictures, jewelry, crockery, plate curiosities and ornamental articles in and about the house, her personal ornaments and wearing apparel to be absolutely hers forever and at her own disposal.
“ Third. I give and bequeath to my son George LeRoy Menzie and to his heirs and assigns forever — after the death of my said wife — the large black walnut bedroom set of furniture — consisting of bedstead, dressing bureau and wash-stand and also my marble top sideboard and also the undivided one-half of all my books; I also give and bequeath to my said son George LeRoy and to his heirs and assigns forever my gold watch-chain which I now wear.
“ Fourth. I give and bequeath to my son John W. Menzie and to his heirs and assigns forever — after the death of my said wife — my black walnut book-case, the large gilt parlor looking-glass and the other undivided one half of all my books. I also give and bequeath to my said son John W. and to his heirs and assigns forever my gold watch which I now wear.
“ Fifth. I give and bequeath to my niece Electa Gee wife of Decatur Gee, of Canastota, N. Y. the sum of One Hundred Dollars to be paid to her by my executor within eighteen months after my decease.
“ Sixth. I give and bequeath to my niece Sarah E. Thompson of Eagle Bridge, N. Y. the sum of Fifty Dollars to be paid to her by my executor within eighteen months after my decease.
“ Seventh. I give devise and bequeath to my son George Le-Roy Menzie and to his heirs and assigns forever one-half of all the rest and residue of my property of every name and nature.
“ Eighth. I give devise and bequeath to my said wife Esther the use, profits and enjoyment during her natural life of the other one-half of all the rest and residue of my property and*138 estate of every name and nature and from and after her death I give, devise and bequeath the capital or principal thereof to my son John W. Menzie and to his heirs and assigns forever."
The deceased testator was the father of the accounting trustee; Esther Menzie, the contestant, is the stepmother of the trustee and of the remainderman, John W. Menzie.
The accounting trustee is the same named in the will of George W. Menzie, deceased.
From the evidence given before me upon the several hearings had herein, it appears that, on the 24th day of May, 1884, this trustee had a settlement of his accounts before the Surrogate’s Court of Madison county and to which proceeding and settlement this contestant, Esther Menzie, was a party, and that she consented thereto in writing; that a decree was duly made and entered and, up to that date, she is bound by the said decree and by all its provisions. She is also estopped from raising any question that she might have raised at that time. The decree is conclusive on matters then within the jurisdiction of the Surrogate’s Court. Laney v. Laney, 47 N. Y. St. Rep. 103.
That decree allowed .and adjusted the account of the executor, as filed by him, and found that the balance for distribution in his hands was the sum of $6,553.25 and directed the disposition of it at that time as follows: “ That he retain the sum of $3,527.96 in full payment of his legacy under said will; that he invest and 'keep securely invested in good interset bearing securities the residue thereof, to-wit: the sum of $2,925.38 and pay over the interest or income arising therefrom, annually, to Esther Menzie during the term of her natural life, and at her decease pay said principal sum of $2,925.38 to John W. Menzie in full payment of his legacy under said will."
The contestant charges that the trustee did not invest and Peep securely invested this fund created for her benefit by the will of her late husband, as required by law and by the duties -devolving upon trustees as custodians of trust funds, and that,
At that time the $6,553.25 of which this estate consisted was already invested, to the extent of $4,000, in what is known in these proceedings as the Bell mortgage on the Menzie farm. The mortgage was dated September 7, 1878. It was assigned to the trustee’s testator January, 1879; and, in ¡November, 1882, this farm was sold for $7,500. In June, 1893, ten acres were released from the farm, which release was prior to the judicial settlement of May, 1884. The mortgage in question was originally for the sum of $4,500, but, at the date of the ju
The evidence shows clearly a great depreciation in the securities of this trust fund since 1889, but evidence fails to show any fault attaching to the trustee. That he received all that could .be realized from the sale of the farm is not questioned by the contestant, and we have no evidence in the record where the .trustee could have .done differently. His account shows attention to the property representing the trust fund. The evidence fails to show that such attention was not sufficient and not intelligent. While the depletion of the trust fund with the absence of returns by way of income, by reason of such depletion, is to be regretted, yet that, alone, is not sufficient to base a finding upon that the trustee is at fault and that his negligence -caused the loss. McCabe v. Fowler, 84 N. Y. 314; Matter of Weston, 91 id. 502.
Some portion of the money and interest of the trustee has ¡always, since the death of George W. Menzie, been commingled with the trust fund. It came to him in that way and so remains to the present time. The contestant alleges this as a fact showing dereliction of duty on the part of the trustee. I fail to see Low it can be held as detrimental to the trust.' He must lose when the trust fund loses, and would gain when the trust fund
The only remaining question requiring examination and. raised by the answer of the beneficiary is whether the expenses and disbursements with which the trustee had credited himself' in his account were proper charges against the income or should, be charged against the corpus of the estate. That the trustee-made the payments credited to him by himself in his account is-not denied, but from what fund .they should be paid is questioned.
It is the settled law of this State that, unless otherwise provided in the instrument creating the trust, the life tenant must bear the expense of ordinary repairs, taxes, interest on incumbrance, if any exist, and insurance. Matter of Albertson, 113 N. Y. 434; Stevens v. Melcher, 152 id. 551; Chamberlain v. Gleason, 163 id. 214; Deavett v. Cooper, 18 Hun, 67; Wilcox v. Quinby, 73 id. 524.
Circumstances will, in all cases, change this rule to some extent. In the case at bar, the improvement, by force of circumstances, has been changed from personalty to realty and, from 1889 to 1897, yielded practically no revenue above an amount sufficient to preserve the fund for the remainderman; -and for so-preserving it the life tenant is called upon to pay the expense. This is not proper and cannot he allowed. Matter of Pitney, 113 App. Div. 845.
Assessments for permanent improvements cannot be paid for out of the income and must he paid out of the principal, and the-courts seem to hold that the life tenant should pay interest on the amount during life. In this case she had no benefit from-those particular items and, as her expectancy is so slight, she-now being eighty-five years of age, the court will not attempt to
In accordance with the foregoing reasoning, the following amounts are disallowed and struck out of the account as filed by the trustee :
Aug. 26, 1891. Paid Canastota Bee............... $2 50
Paid S. M. Wing, foreclosure........ 39 25
Paid P. F. Milmoe, foreclosure...... 25 00
Paid J. E. Stisser, foreclosure....... 11 00
April 13,1892. Paid Travis & Wolf, insurance...... 6 00
Sept. 10, 1892. Paid Farr Bros., hardware and farm.. 3 48
Paid C. A. Marsh, for labor on farm.. 5 25
Paid D. A. Monyer, use of screws.... 1 00
Dec. 1,1892. Paid J. Stisser, work, material and
repairs....................... 23 50
July 7, 1893. Paid Gleason, repairs to bam........ 57 50
Paid Barrett, lumber.............. 72 62
Paid Farr Bros., hardware.......... 6 50
Paid M. Hess, grass seed........... 14 59
Paid J. Stisser, labor and repairs..... 15 64
May 5,1894. Paid M. M. Hess, seed............. 23 75
June 25, 1894. Paid McConnell, paint............. 1 70
Paid P. F. Weaver, paper.......... 4 52
April 4, 1895. Paid Travis & Wolf, insurance...... 6 00
Aug. 20, 1895. Paid John H. Cronk, seed........... 10 50
April 25,1896. Paid 5 bushels timothy seed......... 10 00
May 14,1896. Paid 180 pounds B. wire........... 5 25
Sept. 1897. Paid expense of selling farm........ 3 00
Paid J. E. Brewer, insurance....... 4 35
Dec. 25,1897. Paid sundries....... 12 40
Sept. 1897. Paid 11 loads of dirt............... 11 00
. April 1899. Paid cedar posts................. 5 00
Sept. 26,1900. Paid new drain pipe............... 4 69
July 11,1902. Paid J. W. McPherson, sidewalk..... 4 20
July 18, 1904. Paid strike out.................. 6 00
*144 From the item of $26.63 entered as “City Tax and Sewer Tax.” This amount is arrived at by deducting the amount of former city tax.
June 4,1904. Paid J. S. Tanner, well pump....... 5 00
Nov. 8, 1904. Paid Fitch & Conroy, sewer......... 26 00
Jan. .24, 1905.' P-aid sewer tax................... 5 77
April 22,1905. Paid Milo Torrey, driving well...... 5 00
June 15,1906. Paid sewer cost.................. 87 21
After eliminating the foregoing items from the account, it will be then approved in that regard. I do not determine here ¿the respective amounts of the foregoing items chargeable to the remainderman and to the trustee, individually, who is interested in the fund. The respective rights of the two last-named ¡parties, so far as the amounts struck out are concerned, may remain until the final settlement of the trustee’s account with his remainderman.
A new account may be prepared and filed in accordance with this decision, and decree prepared thereon, and, if agreed upon hy the contending parties, submitted to me for signature; otherwise the matter may be brought before me on five days’ notice.
I am of the opinion that the $500 investment in Farmers’ Loan and Trust Company of Sioux City, Iowa, is not a proper investment, and direct that the same be taken up and invested as provided by statute.
The attorney for petitioner and trustee is allowed twenty-five dollars for making up the account and ten dollars for each day additional, for his services, in addition to his disbursements.
The attorney for the contestant is allowed sixty dollars for his services in addition to his disbursements, both of the allowances to be paid out of the principal of said fund,' chargeable "in the proper proportions to the remainderman and trustee individually. '
Decreed accordingly.