Linsly v. Bogart

67 N.Y. St. Rep. 653, 87 Hun 137

• Court: New York Supreme Court
• Decided: May 17, 1895
• Status: Published

Opinion

Van Brunt, P. J.

We might very well rest our decision in affirming the judgment appealed from upon the exceedingly satisfactory opinion written by the learned referee upon the decision of the question involved before him. It may be well, however, to-revert to one or two points in addition to those which have been considered by the referee. If the tenant for life, as matter of right, is entitled, as is claimed by the appellant, to the increase resulting from the rise in price of the securities in which the trust fund was invested, then it would seem to be right existing in the life tenant, at any time when such premises existed, to compel a sale of the security in which such trust fund was invested, in order that she might realize such increase. It is apparent that no such right exists in the life tenant. Such a power would enable' the life tenant to compel the trustees to speculate in securities, and change investment at her pleasure, and thus deprive the trustees of the ordinary powers which are supposed to be invested in them. It. has been well observed by the referee in his opinion that, even if, by the terms of the will, the life tenant was entitled to the increase realized on the principal of the fund, it could not accrue to her or her estate until the expiration of her life tenancy, as before that time it would be manifestly impossible to ascertain the amount of such increase, or even the existence of any. The present transactions may show a gain, but the next investment may be unfortunate, and involve a loss. It is manifest that it was not the intention of the testator that all gains, when realized, should belong immediately to the life tenant, and that all losses should be charged to the corpus of the fund. It is apparent that the testator intended the provisions of the will under consideration for the benefit of á. tenant for life, to be enjoyed during such life, and not for the benefit of the personal representatives of a person who has been a tenant, but whose term must be ended by death, before the question of whether there is an increase or not can be determined. We think, therefore, that the judgment appealed from should be affirmed, with costs.

All concur.

The opinion of William H. Willis, Esq., to whom the cause was referred, is as follows :

This action is for an accounting of the plaintiff, Wilford Linsly, as executor, etc., of John H. Linsly, deceased, who at the time of his death was .trustee of a certain trust for the benefit of Ann Augusta Linsly under the last will and testament of Richard J„ Morgan, deceased, and also for an accounting of the defendant Stephen G. Bogart, as sole surviving trustee of said trust Said Richard J. Morgan, in and by his said will, gave and bequeathed to his executors one equal third part of his residuary estate in trust for the benefit of bis mother, said Ann Augusta Linsly, during her life, with remainder over to certain other parties. The following is the clause of the will creating such trust: “Eighth. The remaining one-third I give, devise, and bequeath to my executors in trust during the lifetime of my mother, now Ann Augusta Linsly, to receive the interest, dividends, increase, profits, and income of the said one-third, and to pay over the said interest, dividends, increase, profits, and income to my said mother, or to apply the same to her sole and separate use during the period of her natural life ; and, after her death, to distribute the said one-third to and among my issue surviving me, equally, per stirpes and not per capita, for their own use, respective!}', absolutely and forever.” On the 29th day of April, 1886, under and in compliance with a. judgment of this court made in an action brought by said Ann Augusta Linsly against the other parties in interest, one equal third part of said residuary estate was transferred by the said executors to themselves as trustees of said trust.

On the 7th day of February, 1887, this court, upon the petition of said Ann Augusta Linsly, the life tenant, and of the said trustees, and upon due notice to all parties in interest, made an order at the foot of said judgment in the following words:

“At a Special Term of the Supreme Court of the State of Mew

York, Held at the County Court House, in the City of Mew

York, on the 7 th Day of February, 1887.

Present: Hon. George P. Andrew, Justice.

“Ann Augusta Linsly, Plaintiff, against Stephen G. Bogart and John H. Linsly, etc., and others, Defendants.

“Leave having been granted to any of the parties to this action by judgment herein on April 20, 1886, to apply to this court at any time, and from time to time, for its further directions at the foot of said judgment; and the plaintiff having united with the defendants Stephen G. Bogart and John H. Linsly, as trustees of the fund and trust mentioned in the sixth clause of said judgment, in a petition duly made to this court for an order at the foot of said judgment instructing the said trustees as to their duty in the matter of retaining, as a portion of their trust fund, certain bonds purchased and held by their testator in his lifetime, as specified in said petition ; and it having been duly referred to George Putnam Smith, Esq., by an order made in this action on the 13th day of July, 1886, to take proof as to the facts and circumstances alleged in the said petition, verified June 22, 1886, and to take the evidence produced by either of the parties to this action with reference to such facts and circumstances, and with all convenient speed to report such testimony to this court, with his opinion thereon: Mow, upon the coming in of the report of the said George-

Putnam Smith, Esq., dated January 8, 1887, and upon reading and filing’the same, and the evidence of Stephen Gf. Bogart, Edwin S. Larcher, and Thomas Denny, produced and taken on said reference, and upon all the pleadings and proceedings in this action, and at the foot of the judgment herein entered upon the 29th day of April, 1886, as amended on the 1st day of May, 1886, upon proof of due and timely service of notice of this motion for the confirmation of said, report and the entry of this order upon . Charles H. Woodbury, Esq., of counsel for Jennie Jameson Morgan and for Charles Rice, guardian ad litem of the infant defendants, on motion of Bangs & Stetson, attorneys for the said petitioners, after hearing Francis Lynde Stetson, Esq., of counsel, in support thereof, and the said Charles H. Woodbury, Esq., appearing and submitting the rights of the said infant defendants to the protection of this court, it is ordered:

“ First. That the said report of George Putnam Smith, Esq., be and the same is hereby, in all things confirmed.

“ Second. That Stephen G. Bogert and John H. Linsly, be, and they are hereby authorized to retain as trustees for Ahn Augusta Linsly, under the eighth clause of the last will and testament of Richard J. Morgan, deceased, and for the benefit and as a part of the trust fund by them received and now held pursuant to the sixth clause of the judgment heretofore entered herein as aforesaid, the following specific securities, now remaining unsold in their possession, to wit: $15,000 first mort. 7 per cent, bonds, Gulf, Colorado and Santa Fe Railroad Company; $9,000 firsh mort. 6 per cent, bonds, Chicago, Milwaukee and St. Paul (South Minn. Div.) R. R. Co.; $9,000 first mort. 6 per cent bonds, Northern Pacific R. R. Co.; $6,000 first mort. 6 per cent, bonds, Central Pacific R. R. Co.; $2,000 first mort. 6 per cent, bonds, Western Pacific R. R. Co.; $6,000 St. Paul, Minn. & Manitoba R. R. 6 per cent, consolidated bonds; $15,000 Long Island R. R. 5 per cent, consolidated bonds; $30,000 Morgan’s Louisiana & Texas R. R. and S. S. Co. 6 per cent, first mort. bonds, extension ; $93,-000 Morgan’s Louisiana and Texas R. R. and S. S. Co. 7 per cent, first mortgage bonds. For each and every bond retained by them pursuant to the authority herein granted and conferred, the said trustees are hereby directed to create and maintain a sinking fund in manner as follows, that is to say :

“ Out of the interest by said trustees received upon or on account of any bond hereinabove designated, they shall, as thesame is received, deposit as much as is hereinafter indicated with some trust company approved by law, or rule of this court as a proper custodian of trust funds in the city of New York ; and from time to time, in their discretion, they may invest in their names as trustees any funds so deposited and all accumulations of interest thereon in any of the methods recognized and approved under the practice of this court for the investment of trust funds. Upon the sale by them of any of said bonds, the whole amount received by them of the principal of such bond, or for interest accruing subsequent to the death of the said Ann Auffusta Linsly, shall be by them held invested and accounted for as part of the principal of the trust estate for the benefit of the reversioners, and, in addition thereto, such part, if any, of the interest upon such bond theretofore by them received and deposited as a reserve or sinking fund, as aforesaid, as may be necessary to make the proceeds of such bond equal to the value thereof, as stated in the sixth paragraph of the judgment decree in this action of April 29th, 1886 ; and, except as needed for said last-mentioned purposes, all of such reserved interest in respect of any bond so sold shall upon such sale be by them paid and delivered to the said Ann Augusta Linsly or her personal representatives as a part of ihe income of such trust estate during the lifetime of the said Ann Augusta Linsly. The amount to be so retained as a reserve or sinking fund as aforesaid shall on account of each of the said several bonds be respectively as follows, namely: Two-sevenths of the interest received upon every seven per cent, mortgage bond of Morgan’s Louisinaa and Texas Railroad and Steamship Company; two-sixths of the interest received upon every six per cent, mortgage bond of Morgan’s Louisiana and Texas Railroad and Steamship Company, of the Chicago, Milwaukee and St. Paul Railway "Company, of the Northern Pacific Railroad Company, of the Central Pacific Railroad Company, of the Western Pacific Railroad Company, and of the St. Paul, Minneapolis and Manitoba Railroad Company; one fifth of the interest received on each five per cent, bond of the Long Island Railroad Company, together with all interest received upon such reserve or sinking fund. And the said trustees shall not be held to account for any loss which may result to the principal of said securities, or any of them, as long as they are held in the exercise of the authority conferred by this order and pursuant to its terms. Nothing herein contained shall be construed as an interference with or a limitation of the right of the said trustees at any time to sell any one or all of said securities in the exercise of their sound discretion for a reinvestment of the proceeds of such sale or sales in accordance with the practice of this court and the laws of the state of New York.” Certain addtional assets of said estate having subsequently come into the possession of said executors, this court, on the 23d day of December, 1887, upon the petition of said Ann Augusta Linsly, made at the foot of said judgment of the 29th day of April, 1886, and upon notice to all parties in interest, made a further order, which contains the following words :

“ Leave having been granted to any of the parties to this action by the judgment entered herein on April 29, 1885, as amended May 1, 1886, to apply to this court at any time and from time to time for its further directions at the foot of said judgment; and the plaintiff having duly applied, pursuant thereto, by her petition verified October 4, 1887, for an order directing the defendants Bogert and Linsly, as executors of the last will and testament of Richard J. Morgan, deceased, to give an account of their proceedings as such executors, and of the assets and income of their testator’s estate which have come into their hands subsequent to the 30th day of January, 1886, and praying also that the portian of said assets and income devoted to the use of the plaintiff" by the will of their testator to be set apart, and that the trustees, of the trust fund for the benefit of the plaintiff be instructed as to-their duty in the matter of retaining for the benefit of the said fund such share or portion of the bonds of Morgan’s Louisiana and Texas Railroad and Steamship Company stated in said petition to have been purchased and held by the said Richard J. Morgan in his lifetime, and to have come to the possession of the said executors subsequent to January 30, 1886, as should be ascertained and adjudged to form a part of the said trust fund, and for other relief; and it having been duly referred to George- Putnom Smith, Esq., counselor at law, by an order duly made and entered herein on the 14th day of November, 1887, to take proof of the matters and circumstances alleged in said petition, and to take and state the accounts of the said Stephen G. Bogert and John H. Linsley. as executors, and to hear, try, and determine any questions which might arise respecting the settlement of said accounts, the value of the assets in the hands of the said executors, the amount of their lawful commissions, and the manner in which the estate of the testator may be divided, and to report to this-court with all convenient speed ; now, upon the report and opinion of the said George Putnam Smith, Esq., referee, dated December 15, 1887, and upon the testimony of Stephen G. Bogert and John H. Linsly taken, subscribed, and sworn to before said referee, and the proof of due notice of motion to confirm the same and for judgment as herein provided upon Charles H. Woodbury, Esq., attorney for Jennie Jameson Mandeville (late Morgan), upon Bangs & Stetson, attorneys for the executors and trustees, upon T. G. Cronin, Esq., attorney for Charles Rice, Esq., guardian ad ¡item for the infant defendants Jennie R. Morgan, Mary M. Morgan, and diaries Morgan, and also upon said Charles Rice, guardian ad litem, in person, and upon all the pleadings and proceedings heretofore had herein, including the judgment dated and entered in this action on April 28, 1886, as amended as aforesaid, and the proceedings upon -which the said judgment was made,, and also upon order of this court dated February 7, 1887, and filed on the 8th day of February, 1887, and the proceedings upon which the'same was made, and upon motion of Mr. Van Sintieren attorney for the plaintiff, Mr. Stetson, on behalf of said executors, and Mr. Woodbury,' on behalf of said Jennie Jameson Mandeville(late Morgan), appearing, but not opposing, and Mr. Cronin, attorney for Charles Rice, guardian ad, litem, appearing and submitting the rights of the infant defendants to the protection of this-court, at the foot of the judgment entered in this action as aforesaid on April 29, 1886, as amended on May 1, 1886, it is ordered, adjudged, and decreed as follows: * * *

“ (8) That the defendants Stephen J. Bogert and John H. Linsly do forthwith pay, transfer, and deliver to themselves as trustees under the last will and testament of Richard J. Morgan, deceased, for the benefit of the plaintiff, Ann Augusta Linsly, to-be held by the said Bogert and Linsy, as trustees for the plaintiff, upon and pursuant to the terms of the eighth clause of said will, the sum of one thousand two hundred and ninety-five and thirty-one hundredth dollars ($1,295.80) in cash from the moneys in the hands of said executors belonging to the principal of the estate ; also the sum of nine thousand one hundred and thirty-five and seventy-two one hundredth dollars ($9,135.72) in cash from moneys in the hands of said executors belonging to the income of said estate (the said last-mentioned sum to be thereupon forthwith paid to the said Ann Augusta Linsley by the said Stephen Gr. Bogert and John H. Linsly, as trustees for her, as aforesaid), — making in the aggregate the sum of ten thousand four hundred and thirty-one and twenty-hundredths ($10,431.20); and also one hundred and seventeen (117) of the bonds of Morgan’s Louisiana and Texas Railroad and Steamship Company now held by said Bogert and Linsly as executors as aforesaid, every such bond to carry all coupons maturing after October 31, 1887 ; and, upon the entry of this decree, the said Stephen Gr. Bogert and John H. Linsley shall be deemed and determined to have received and be in possession as trustees, under the eighth clause of said will, of one-third part of the principal of the estate of Richard J. Morgan, deceased, to be held by them in trust as directed in and by the eighth clause of said will; and from and after the entry of this judgment decree, their liability and the liability of either of them as executors in respect thereto shall cease and determine.

“It is further ordered, adjudged, and decreed that Stephen G. Bogert and John H. Linsly be, and they are hereby, authorized to retain as trustees for Ann Augusta Linsly, under the eighth clause of the last will and testament of Richard Morgan, deceased, and as a part of the trust fund for her benefit, the whole or any part of the one hundred and seventeen bonds of the Morgan’s Louisiana and Texas Railroad and Steamship Company, which, as executors as aforesaid, they are herein directed to deliver to themselves as trustees for the said Ann Augusta Linsley; and for each bond retained by them pursuant to the authority herein granted and conferred they are hereby directed to create and maintain a sinking fund in manner as follows, that is to say: Out of the interest by said trustees to be received after the entry of this judgment or decree upon or on account of each of such one hundred and seventeen bonds of the Morgan’s Louisiana and Texas Railroad and Steamship Company, the said Bogert and Linsly shall, as the same is received, deposit so much thereof as is hereby indicated with some trust company approved by law or rule or order of this court, as a proper custodian of trust funds in the city of New York; and from time to time, in their discretion, they may invest in their names as trustees any funds so deposited and all accumulations of interest thereon in any of the methods recognized and approved under the practice of this court for the investment of trust funds. Upon the sale by them of any such bond, the whole amount received by them for the principal of said bond or for interest accruing subsequent to the death of Ann Augusta Linsly shall be by them held, invested, and accounted for as a part of the principal of the trust estate for the benefit of the reversioners; and, in addition thereto, such• part, if any, of the interest upon such bond, theretofore received by then and deposited as a reserve or sinking fund as aforesaid, as may be necessary to make the proceeds of such bond equal to the value thereof, as stated in the aforesaid report of George Putnam Smith, dated December 15, 1887, to wit, the sum of twelve hundred dollars ($1,200), and except as needed for said last-mentioned purpose, all of such reserved interest in tespect to any such bond so sold shall upon such sale be by them paid and delivered to the said Ann Augusta Linsly or her personal representatives as part of the income of such trust estate during the lifetime of the said Ann Augusta Linsly. The amount to be so retained as a reserve or sinking fund as aforesaid shall on account of each of said one hundred and seventeen bonds of Morgan’s Louisiana and Texas Railroad and Steamship Company be two-sevenths of the interest received upon each such bond ; the indicated sinking fund on account of such bond so held to be maintained by said trustees from and after the first receipt of interest after the entry of this judgment decree, and for as long as they shall continue to retain such bonds. But nothing herein contained shall be construed as an interference with or a limitation of the right of the said trustees at any time to sell any one or all of said bonds in the exercise of their sound discretion for a reinvestment of the proceeds of such sale or sales in accordance with the practice of this court and the laws of the state of ISTew York. * * *

i-It is further ordered, adjudged, and decreed that the order made herein at the foot of the judgment, dated the 29th day of April, 1886, as amended May 1, 1886, which said order is dated February 7, 1887, and was filed February 8, 1887, be, and the same hereby is, amended by striking out from the tenth line on the fourth page of said order the words 1 sixth paragraph of,’ and inserting in lieu thereof the words ‘ tenth finding of the report of John Clinton Gray, referee, dated April 22, 1886, as confirmed by’; and the clerk is herewith directed to correct the said order on file in accordance herewith.”

Underand in pursuance of these orders, the trustees continued to hold the bonds in question as part of "the trust estate, and to withhold from the life tenant the prescribed portion of the income therefrom for the sinking fund. This sinking fund now amounts to the sum of $42.969.83. Recently these bonds, with certain other securities belonging to said trust estate, have been sold, realizing altogether the sum of $36.427.68 in excess of the value at which they were taken into the trust The life tenant now asks that she receive the amount of said sinking fund, and it is not disputed that she is entitled thereto. As all the securities in question have been sold at an advance, there can, of course, be no further need of a sinking fund to protect against loss. The amount was deducted and withheld from the incometo which the life tenant was entitled, and should now be paid over to her.

The life tenant also claims that she .is entitled to the profit of $36,427.68, so received on the sale of said securities as “ profits’’ or increase ” of the trust estate payable to her by the terms of the will. We have seen by the will she is given “ the interest, dividends, increase, profits, and income" of the fund, and stress is laid by her upon the use óf the words “ increase ” and “ profits ” as supporting her contention. It is clear that she has no right to the sum in questions either as “interest," “dividends,” or “income.” In the American and English Encyclopedia of Law the general rule is stated to be that “ an appreciation in value of the property bequeathed constitutes capital, and goes to the remainder-man.” In Abbott’s Hew York Digest (volume 10, p. 770) we find the following language upon this subject: “ The current of authority is that as to the relative rights of life tenant and remainder-man the courts will treat anything in the nature of premium or an appreciation in value of the capital of a trust fund as capital, and anything that is interest, income, or proceeds, no matter how extraordinary or unusual it may be, as belonging to the life-tenant.” See, also, 2 Perry, Trusts, §§ 544, 545; Scovel v Roosevelt, 5 Redf. Sur. 121; Cragg v. Riggs, id. 82 ; Clarkson v. Clarkson, 18 Barb. 646.

It is conceded, indeed, by the life tenant, that in the absence of the words “ increase ” or “ profits ” her position would be untenable ; and the court of appeals has so held in Re Gerry, 103 N. Y. 445; 3 St. Rep. 688. In that case the will of Gr. gave to bis executors the sum of $70,000, in trust to invest the same in certain specified securities, to'pay the annual interest, income, and dividends thereof to L during her life, and upon her death to divide " “ the principal or capital sum aforesaid ” among certain remainder-men. With the consent of all parties interested, a portion of the fund was invested in securities other than those named, but all drawing a fixed rate of interest, payable annually. A sale of the securities after the death of the life tenant resulted in a surplus over the amount of the original investment. Upon a settlement of the accounts of the trustees, it was held that the surplus was an accretion of the principal of the fund, and the remainder-men were entitled thereto. It remains, therefore, to consider what meaning or value is to be given to the words “increase" and “profits,” upon which this life tenant relies. It is evident that these two words as used by this testator must be treated as entirely synonymous. Ho intelligible distinction between them in such a case seems ever to have been made by the courts, and presumably none can be made. It is difficult to conceive of an increase during any given time without a profit within the same period, and equally difficult to conceive of a profit without" an increase under like circumstances. To attempt to discriminate would involve a discussion too abstruse .and metaphysical for a court of law;

In regard to the precise force or weight of the words in question as found in this will there have been but comparatively'few adjudications. In Re Clark, 62 Hun, 275 ; 42 St; Rep. 300, a testator had given his wTife “the income of all my other .estate, both real and personal,” and also “the profits of all my other estate, both real and personal.” He also gave to his wife “ the income and profits ” of a separate fund. The general term of this court, in its opinion, makes use of the following language: “This use of the words ‘income and profits’ is only due to the lawyer-like fondness for using several words where one is sufficient. If the executors had not sold the real estate, and if the real estate had increased in value during the widow’s life, she would not have been entitled to the increase. So with personal property. This question is carefully discussed and fully settled in Re Gerry. We think that the use of the word ‘profits’ in these items of the will has no additional meaning to the words construed in that case.” In the case of Cross v. Trust Co., 75 Hun, 533; 57 St. Rep. 656, the court, in considering the meaning of the words “rents, income, issues, and profits” in connection with the claim of a life tenant to a large sum received by way of premium upon a sale of securities, said: “The fund in question represents the increase in value of the securities, and is therefore not profit in the ordinary acceptation of that term. It is an accretion or increase from natural causes. Profit is acquisition of gain above expenditures arising from some transaction or operation. Under this will there was to be no trafile or operations, but only an investment of the fund.” In Hooper v. Rossiter, 1 McClel. 527, where a life tenant was given “the interest, dividends, profits, and proceeds” of certain bank stock, and where a claim was made by the life tenant to stock dividends as representing dividehds or profits, we find the following words in the decision of the court: “Whether . thé testator makes use of the expression ‘dividends’ or ‘dividends and profits’ or ‘dividends, interest, and profits.’ or, as in this case, ‘interest, dividends, profits, and proceeds,’ I look upon all of them to come to the same thing, and that this is too nice a"circumstance to found any distinction on. That disposes of the claim of the plaintiffs as tenants for life.” In the case or Duclos v. Benner, the will contains a direction to the executors in the following words: “To set apart or invest the sum of $30,000, or one-third of the appraised value of my personal estate, as my said wife may elect in writing, and pay over the income, interest, profits, and earnings therefrom to my said wife, half yearly as long as she .shall live.” The executors, having invested the sum of $40,000 in Untied government bonds, realized a considerable profit thereon, and the life tenant, on the theory that she had elected that $30,000 of the sum so invested should constitute the trust fund so provided for her benefit, claimed that by the terms of the will she was entitled to the profit made thereon. The opinion of the court at special term was directly in her favor upon this point; but, for other reasons, .the decision and judgment subsequently rendered were wholly adverse to her claim. On appeal to the general term, the judgment below was affirmed, with a modification in respect to the distribution of the profit in question among certain other parties. This court, in its opinion, discusses at length the meaning of the word ‘profits,' holding substantially that as used in the will in question it means nothing more that income. 62 Hun, 428 ; 42 St. Rep. 929. On further appeal to the court of appeals, that tribunal reversed the judgment of the general term, and affirmed that of the special term. The reasons for such reversal, however, had no relation to the construction so placed by the general term upon the word “profits”; and the court expressly refused to consider that point, saying that it was unnecessary under the circumstances. 136 N. Y. 560 ; 49 St. Rep. 690. The decision of the general term in this case, therefore, although reversed upon other grounds, still remains as an expression of the unanimous opinion of the members of that body upon the very point now in dispute, and is entitled to great weight.

In the creation of life estates or trusts in real property, it has always been usual to use the words “rents,” “issues,” and “profits” as synonymous with “income.” Why should a different rule obtain in relation to personalty? The principle is well established that in construing a will the intention of the testator should be ascertained by a consideration of its provisions, and, if possible, carried into effect. In re Gerry, supra. There is certainly nothing in the will in question to indicate that the testator wished the trustees to deal in securities for the benefit of the life tenant. Such an idea probably never even occurred to him. The words ■“increase” and “profits” were doubtless added to “interest,” “dividends,” and “income” in the preparation of the instrument through the habit of redundant expression peculiar to the legal profession, and without intention or thought on the part of lawyer or client of expressing more than is meant by the word “income.” If the position of the life tenant in this matter be correct, then, whenever the trustees realize an advance in the securities in which the fund is invested, such advance will be immediately payable to her as “profits”; while, in the event of a decline, the loss will fall upon the estate. By a series of such transactions, the entire fund might be dissipated, — a result which the testator could hardly have contemplated. Moreover, the life tenant is still living, and it is apparent that, even if by the terms of the will she were entitled to the net increase realized on the principal of the fund, it could not accrue to her or her estate until the expiration of her life tenancy, as before that time it would be manifestly impossible to ascertain the amount of such increase or even the existence of any. The present transactions, it is true, show a gain, but the next investments may be unfortunate, and involve a loss. To pay all gains as realized immediately to the life tenant, and to •charge all losses to the corpus of the fund, would certainly be a novel process, to say the least. Again, an examination of the orders of the 7th day of February, 1887, and the 23d day of December, 1887, hereinabove mentioned, shows that with respect to the securities specified and included therein, respectively, they áre an absolute estoppel and bar to the claim of this life tenant. It appears by the petitions of the life tenant herself upon which the orders were granted that the latter were made for the express purpose of enabling her to obtain a larger income. For that special purpose the trustees were permitted to hold the securities in question, which were not such as are authorized by law for investments of trust funds. To provide against possible loss by depreciation, a sinking fund was established from the income otherwise payable to the life tenant; and it was further provided that, “upon the sale by them (the trustees) of any of said bonds, the whole amount received of the principal of such bonds or for interest accruing subsequent to the death of the said Ann Augusta Lin sly shall be by them hel'd invested and accounted for as part of the principal of the trust estate for the benefit of the reversioners.” At the end of each of the orders the following additional words appear: “Nothing herein contained shall be construed.as an interference with or limitation of the right of the said trustees at any time to sell any one or all of said securities, in the exercise of their sound discretion, for reinvestment of the proceeds of such sale or sales in accordance with the practice of this court and the laws of the 'state of New York.” Language could hardly be clearer or meaning plainer. The proceeds of any sale or sales of the securities were to be invested and accounted for as part of the principal of the trust estate, as a condition upon which the petitions of the life tenant were granted and the securities permitted to be held for her benefit. She certainly cannot now dispute the validity and binding force of the orders, nor question their obvious meaning.

. I am therefore of the opinion that the words “increase” and “profits,” as used in this will, mean simply “income,” and that the life tenent is entitled to no more than the income of this trust estate ; also, that, if she were entitled to any proceeds of the trust estate other than income, such proceeds would not be payable untd the termination of the life estate; also, that even if, under the will, she were entitled to more than the income in question, the orders so made on the 7th day of February, 1887, and the 23d day of december, 1887, respectively, would be a complete bar to her present claim to the advance realized on the sale of the securities included in said orders, or either of them; also, that the entire advance realized on the sale of securities belonging to said trust estate constitutes an accretion to the principal of said estate, and should be held and invested as a part thereof.

Objection is made to the claim of the plaintiff, Wilford Linsly, as executor, etc., of John H. Linsly, the deceased trustee, to commissions for receiving the principal of this trust estate, upon the ground that, prior to his death, said John H. Linsley. had commenced this action for leave to account and resign the trust. It is true that by a voluntary resignation a trustee surrenders his absolute right to commissions upon principal. His claim then rests, upon the sound discretion of the court. In re Allen, 29 Hun, 9; affirmed, 96 N. Y. 327 ; In re Hayden, 54 Hun, 204; 26 St. Rep. 911; affirmed, 125 N. Y. 776. But this trustee did not, as matter of fact, obtain the leave to resign which he sought, but died during the pendency of the action, which has since been continued by his executor. The trustee died in office, and the commencement of the action by him before his death, therefore, amounts to nothing more than an expression of his wish to resign at that time, and cannot operate to deprive his representative of the commissions earned.

Objection is also made to the claim of the plaintiff as executor of the will of the deceased trustee to commissions on securities received from the executors and not converted into cash until after the death of the trustee in question. This objection is based upon a decision of the court of appeals in the case of McAlpine v. Potter, 126 N. Y. 285; 37 St. Rep. 6, holding that where trustees have not in fact converted into money securities forming part of the capital of the trust estate, nor delivered the same as cash to the beneficiaries, they cannot be allowed to credit themselves with or receive commissions for receiving such part of the principal of the trust estate. After a careful examination, I am unable to dis-. tinguish that case from the one now under consideration. In the present action, certain of the securities received from the executors had not been sold by the trustees at the death of Mr. Linsly,e nor had any part of the same been paid over to the remainder-men. It is true that, in and by the orders hereinabove cited, a valuation had been placed upon' said securities, but such valuation was merely for the purpose of fixing and establishing a proper sinking or indemnity fund, and had no other significance whatsoever. The decision referred to must therefore be decreed controlling in this case, although at variance with the rule, as previously understood with regard to the matter in question.