Tower's Estate ( 1916 )

Opinion by

Mr. Chief Justice Brown,

The testator, after making certain bequests and legacies, gave the residue of his estate to his executors in trust, providing, inter alia, as follows: “In trust nevertheless to take possession of, hold, manage and appropriate the same and to collect, receive, obtain and recover all the rents, issues, profits, income, dividends and gains thereof and all the proceeds and avails thereof, and to invest and keep invested the same and every part of the capital thereof, so as to make the same as productive as reasonably can be, and to keep proper accounts, as hereinafter more particularly directed in respect to the said trust property and the proceeds, avails and income therefrom, hereby directing them to preserve such investments, and securities as I shall leave standing in my name, so> long as they, my said trustees, or their successors in the1 trust, shall deem prudent, and making such new investments as they in their best judgment and discretion shall deem advisable and advantageous to my estate, without confining themselves to such investments as the law directs for the investment of trust funds, hereby allowing them full power to select any investments or securities they may approve except the capital stocks of corporations and obligations not accompanied with reasonable securities, with full power also to the said trustees to change any such investments, whether left by me or made by them, and to convert and reinvest the proceeds whenever and as often as they in their judgment and discretion may think most to the advantage of my estate.” Among the .investments of the testator at the time of his death were five hundred shares of the capital stock of the Fidelity Trust Company. Some time before the trustees filed their account in the court below that company doubled its capital stock and gave to each stockholder the right to subscribe, at par, for additional shares, equal in amount to his or her holdings. The appellants, as trustees, exercised this right, subscribed and paid for the additional stock, filed an account, in which the transaction was set forth, and, having come into court with a petition for distribution, asked it to confirm their account. No objection was made to it by any party in interest. The auditing judge, however, in interpreting the above-quoted clause, held that the appellants’ exercise of their right to take the shares of the capital stock of the said company allotted to them could not be approved. Exceptions to the adjudication were dismissed by the court in banc. The adjudicating judge was of opinion that, if the accountants had invested in new stock of the company such an amount as would have been received by them from a sale of their rights to subscribe for the shares allotted to them, such an investment might reasonably be regarded as a continuance of testator’s investment, under his direction to them “to preserve such, investments and securities as I shall leave standing ini my name, so long as they, my said trustees, or their successors in the trust, shall deem prudent.” This distinction we cannot follow. If the trustees can sell the shares: allotted to them, or their rights to subscribe for them, and, with the proceeds of such sale or sales, purchase new capital stock of the Fidelity Trust Company, without violating the direction of the testator as to the preservation of his investments and securities, it would seem a fortiori that they can take up what has been allotted to them on the capital stock which came to them from him.

The shares of the capital stock of the Fidelity Trust Company held by the testator at the time of his death were an investment made by him, and his injunction to his executors and trustees is to preserve it. To preserve is to keep, to save, to maintain, to retain. What the trustees did in taking up the allotments was the preservation of the investment made by the testator. If they had not taken them up, they might fairly have been regarded as ignoring his direction to them. What they have done is clearly in keeping with his instruction as to what they should do. They have done manifestly what he would have done, if living, with the investment which he had made, and their account should have been confirmed. They have but kept and preserved his proportionate holding of the capital stock of the company. The decree of the court below is reversed and the account of the trustees is now confirmed, the costs below and on this appeal to be paid out of the funds in the hands of the accountants.