Stubbs v. Stubbs , 4 Redf. 170 ( 1879 )

The Surrogate.—The terms of the will would seem to vest the $10,000 in the widow in trust; for it is not given to the executors in trust, and it is probable that an assessment as against the executors could not have been enforced, except for the fact that the executors did assume to control the principal sum to invest if, to collect the interest, and pay the samé to the beneficiary, all apparently with her concurrence. But I am entirely clear in the opinion that the widow can, at most, be charged with the amount levied upon the $10,000, and that any penalty or interest resulting from the nonpayment of the taxes when due should not be charged to her, for the reason that she was not guilty of any neglect, but the executors, having funds in their hands sufficient to pay, were guilty of such neglect.

The' question involved in this case is whether the $10,000, set apart for the widow, are liable to the payment of a proportionate part of the taxes, or whether the tax is chargeable upon the body of the estate. This point seems to be fully considered and decided in Whitson v. Whitson (53 N. Y., 479). In that case the testator bequeathed to his wife the use for life of $10,000, directing his executors to pay lawful interest thereon semi-annually to her from the date of his death, and after his decease the principal to go to her heirs had by him, and without such heirs to his son Oliver, and then disposed of the residue. The executors paid taxes upon the principal sum out of the interest received by them, and the balance to the widow, and on the final accounting, she claimed the whole interest, without deduction for commissions, &c. The Surrogate sustained the claim. It would seem that the general term affirmed the decree of the Surrogate, for the appellants were the executors. Judgment of the Supreme Court affirming the decree was reversed, and the appellants were allowed theamount of taxes, and their commissions on $10,000. Judge Grover, at page 481, at the commencement of his opinion, says : “The question in this case is whether the bequest to the respondent was the use and income of $10,000 during her life, or an annuity of $700, payable semi-annually, for the same period. If the former, the taxes upon the fund and expenses of the trust must be paid out of the income.” (Citing several authorities.) “If the latter, it is equally dear that that sum must be paid to her from the estate, without any deduction on account of taxes imposed upon the fund producing the annuity, but these must be paid out of the estate.” He reaches the conclusion that the language of the will did not give an annuity, and cites 2 Redf. on Wills, 453, to the effect that it is settled in the American courts, as a general thing, that a bequest of the interest of a particular sum will not be construed as giving an annuity, though payable annually, but is simply a gift of the income or interest of the amount. The language in the present caséis “to receive the interest of the same for the term of her natural life,” and comes within the language of Iiedfield, cited by the learned judge in the case above referred to. Judge Grover also argues that in that case the construction is confirmed by the fact that the decedent disposed of all of the residue of the estate, so that there was no fund out of which to pay the taxes, which is inconsistent with the intention of the testator to devote any part of said residue to the payment of such taxes. In this ease the testator also disposed of the entire residuum. I- am entirely clear that the interest given to the widow was such an interest as should be realized after the payment of the necessary taxes and commissions. The taxes should, however, have been paid by the executors when due, they having a fund in their hands for that purpose. Hone of the interest or penalty, therefore, is chargeable upon the $10,000, and only such proportionate share of the taxes is chargeable upon the §10,000 as bears the same ratio to $369.60, the whole tax levied, that $10,000 does to 13,200, the whole valuation.

Ordered accordingly.

Subsequently a motion was made by the widow for the assignment to her by the executors of the bond and mortgage. The facts were substantially the same as in the preceding application. It appeared, however, that the widow was sixty nine years old.

The Surrogate.—In Spear v. Tinkham (2 Barb. Ch., 211), at page 215 the Chancellor says: “Where specific articles, not necessarily consumed in using, are bequeathed to a legatee for life, with a limitation over, without any direction to the executor to hold them in trust for the remainderman, the executor is authorized to deliver the same to the person entitled to a life estate therein; taking from such person an inventory and receipt, stating that such articles belong to the first taker for life, and that afterwards they are to be delivered to the legatee, who is entitled to them in remainder.” Story, in his Equity Jurisprudence, section 976, says : “ The general rule is that wherever a trust exists, either by declaration of the party, or by intendment, or by; implication of law, and the party creating the trust has' not appointed any executor to execute it, equity -will! follow the legal estate, and decree the person in which it^ is to vest to execute the trust.” In this case there is no vesting of the legacy in question in the executors, but it is given by the will to the widow, and was evidently so intended, the testator trusting to her to deliver over the property unimpaired at her decease to the remainder-man.

The English rule in chancery, as stated in 3 Williams on Executors, 1198 (marginal paging) is, that the old chancery practice required the tenant for life to give security for the protection of the remainderman, but this is no longer required, unless a cáse of danger is shown. (See Tiffany & Bullard on Trusts, 619; Perry on Trusts, .§ 541; Langworthy v. Chadwick, 13 Conn., 43.)

In Taggard. v. Piper (118 Mass. 315) it was held that a legacy given generally, accompanied by a bequest over, in case the legatee should die without issue, should be paid to the legatee without security, if there be no suggestion that he will waste, secrete, or remove the property ; implying the authority of the remaindermen to demand security, on showing that the estate is'in danger of being secreted, &c.

In this case there seems to be little, if any, suggestion of danger to the remaindermen, except such as is anticipated by reason of the advanced age of the tenant for life. Iam inclined to the opinion that it will be both safe. and just to direct the assignment of the bond and mortgage to her, for the purpose of collecting and using the income, without power to collect the principal, except, on application to this court.

Ordered accordingly.