Roosevelt v. Roosevelt

5 Redf. 264 | N.Y. Sur. Ct. | 1881

The Surrogate.

The natural first impression, in considering this case, was to ascertain the amount of loss of principal and of interest, by a computation of interest upon the amount due to the decedent at his death upon the respective obligations referred to, deduct the amount realized from the principal and interest thus computed, and charge to the respective beneficiaries the amount of the loss, in proportion to their interests, respectively, so ascertained. But a moment’s reflection showed that that was an erroneous basis, for the reason that the amount due at the death was not realized, and therefore was not a proper statement of the remainder-man’s interest. Hence, it becomes necessary to adopt some rule, by which it can be ascertained what the equitable proportion of the loss sustained is. The rule in England, stated in Cox v. Cox (L. R., 8 Eq. Cas., 343), and adopted by the referee, which rule, it is supposed, was evolved from the necessity of the case, seems to be the only one by which to approximate the relative liability of the life tenant and remainder-man, to sustain the loss. In that case, the vice-chancellor computed the interest, in ascertaining the principal, at four per cent., the current rate in England then being five per cent.

The only other question which seems necessary to be discussed is, what should be the rate of interest computation, in the effort to ascertain the remainder-man’s interest in the fund realized. The rule adopted in Williamson v. Williamson (6 Paige, 398), was to make the computation at five per cent., in analogy to the rule in England of three per cent-., in cases between legatees for life and remainder-men, so as to apportion the capital and income between them, although the reason for this reduction is not stated. It is supposed to be based upon the fact that suitable investments cannot be always promptly made, at the highest legal rate of interest, and that it would be unjust to the remainder-man to adopt the highest rate in such computation. In the absence of any rule upon the subject in this country, and respecting the authority of the English vice-chancellor, and the experience and learning of the referee, and regarding the rule adopted as consonant with the principles of equity, I am of the opinion that the report of the referee should be confirmed and the exceptions overruled.

Ordered accordingly.