Chester, J.:
The controversy arises because of the claim of the defendant Israel Putnam that his mother was the absolute owner of all the property received from her father’s estate, and that there was no trust under his will: His interest in making" this claim arises from the fact that under his mother’s will he was the sole beneficiary except for a single small legacy to another. So far as this court is concerned it is settled that the estate was one held by Judge Putnam in trust for the benefit of his wife for life, with remainder over -to their three children in equal shares upon her death.
It is evident that there were times when Judge Putnam was of the opinion that no trust was created, for he says in Exhibit 27, which has been received in evidence on this trial against his estate, but not against hers, that “ the eighteenth clause of the will does not convey the estate to John R. Putnam as trustee, but the said clause and the twenty-first bequeaths the property therein mentioned to Mary S. Putnam. At the most the eighteenth clause gives to John R. Putnam a power to manage and control the estate bequeathed to his wife.” This undoubtedly explains very much of his conduct with relation to this estate, especially that of taking and holding many of [474]*474the securities in his wife’s name and of commingling the proceeds with his own and her own private funds and in a bank account in his name and that of his wife, upon which either could draw. '
- ¡Notwithstanding he may have been at times of this opinion, it could not have been a very well-settled one, for he must at the same time have realized that there was a liability of his being charged as trustee for this estate, because when he received it he receipted therefor as trustee and his acts all through the management of the estate were inconsistent with this opinion. This is evident not only in his dealings with others, but with his wife in relation thereto. Also in Exhibit -27 he takes credit to himself for the amount of his commissions and expenses as trustee. So, too, the note which he took from his wife to balance the trust estate as shown by Exhibit 27 was made payable to “John ¡R. Putnam as Trustee under the will of It. M. Shoemaker, deceased,” the body of this note being written by the clerk of Judge Putnam under his direction and the note itself being signed-by her and-delivered to him. It is clear, therefore, that notwithstanding t-lie opinion expressed by Judge Putnam in Exhibit 27 to the contrary, both he and-his wife regarded the property received from her father’s estate as held in trust. That being their understanding, and it having been so decided by the interlocutory judgment, the principal, question to be determined now is as to the amount of "the trust estate.
We agree in many respects with the conclusions of .the learned trial court, but we will content ourselves in' this opinion witli discussing only those, features of the case where we are compelled- to differ from such conclusions.
In the first place we are convinced, notwithstanding the very able and ingenuous argument of the learned counsel representing Mrs. Putnam’s estate to the contrary, that the Statute of Limitations does not stand in the way of the consideration of any question arising iri the case on it's merits. This defense had not been interposed at the time of the former trial but was first put in by the defendant Pendrick, as administrator with'the will annexed of her estate, who was brought into the action in 1905 in the place of the late Charles II. Sturges, who was the executor of her will. It is sought by this defense to save her estate from liability for such j>arts of the-principal of the trust estate.as came to her hands more than [475]*475six and more than ten years before the action was commenced both the six and the ten-year Statutes of Limitations being pleaded. Under the will of her father, as construed by this court in this action, the plaintiff and his two brothers became upon the death of their mother the absolute owners as tenants in common of the property given to Judge Putnam in trust for the benefit of his wife for life. The Court of Common Pleas of Hamilton county, O., in an action brought for the construction of this will, -in which Judge and Mrs. Putnam and their three children were. parties, in 1887 made a decree to the same effect. It was thus established that all the property received by Judge Putnam pursuant to the 18tli clause of the will of his wife’s father was trust property; that he held the legal title thereto as trustee ; that he so held it for her benefit until her death, and that upon her death her three children became the absolute owners thereof in equal shares by virtue of the will. The children had no right to its possession or enjoyment so long as their mother lived. It was not payable to them until her death. It would be a strange rule for the administration of trust estates to hold that when the trustee because of his belief, mistaken or otherwise, that the trust was not valid or effective, permitted the life tenant wrongfully to take the legal title to the trust' estate without the knowledge, of the remaindermen so far as appears and hold it for a period long enough for the ten-year or the six-year Statute of Limitations to run, the remainderman,, who begins his action before these statutes have run against him, is powerless to compel a restoration of and an accounting for the trust estate.
The Statute of Limitations does not begin to run until a cause of action accrues. This action was commenced, it is true, before the deatli of the life tenant, but by reason of her death soon thereafter it has become practically an action to compel the turning over of the trust estate to the equitable owners thereof.
Under the circumstances presented here we do not think the statute began to run against the plaintiff or his brothers until the death of their mother. Gilbert v. Taylor (148 H: Y. 298) is an authority for this conclusion. There the income of $10,000 was given to a person for life and upon her death said s'um was given to her sister. An infant son of the testator was the residuary legatee. The life beneficiary was appointed his testamentary guardian and a general [476]*476guardian was appointed, to act in conjunction with the testamentary guardian. The guardians compelled the executors and trustees under the will to account and obtained a decree, requiring the - executors to transfer and turn over the estate in their hands to the guardians. The guardians paid the interest on the legacy to the life beneficiary for four or five years and after that time paid her a gross sum which enabled her to realize the interest. Shortly after the death of the life tenant the remainderman brought the action against the residuary legatee to whom the surviving guardian had paid the residue of the estate.charged with the burden of the legacy. The Statute of Limitations was set up in defense and -it.was urged that the plaintiff’s legacy had vested at- testator’s death and that more than ten years had elapsed since the cause of action accrued.. It was held that although the legacy vested at the death of the testator, it did not become payable until the death of the life beneficiary and not until then did the cause of action arise and that the defense of the Statute of Limitations was, therefore, properly overruled.
To the same effect is Zee v. Horton (104 N. T. 588).
In Perry on Trusts (5th ed. § 245) it is said“ A person may become a trustee by construction, by intermeddling with, and assuming the management of property without authority.
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Chester, J.:
The controversy arises because of the claim of the defendant Israel Putnam that his mother was the absolute owner of all the property received from her father’s estate, and that there was no trust under his will: His interest in making" this claim arises from the fact that under his mother’s will he was the sole beneficiary except for a single small legacy to another. So far as this court is concerned it is settled that the estate was one held by Judge Putnam in trust for the benefit of his wife for life, with remainder over -to their three children in equal shares upon her death.
It is evident that there were times when Judge Putnam was of the opinion that no trust was created, for he says in Exhibit 27, which has been received in evidence on this trial against his estate, but not against hers, that “ the eighteenth clause of the will does not convey the estate to John R. Putnam as trustee, but the said clause and the twenty-first bequeaths the property therein mentioned to Mary S. Putnam. At the most the eighteenth clause gives to John R. Putnam a power to manage and control the estate bequeathed to his wife.” This undoubtedly explains very much of his conduct with relation to this estate, especially that of taking and holding many of [474]*474the securities in his wife’s name and of commingling the proceeds with his own and her own private funds and in a bank account in his name and that of his wife, upon which either could draw. '
- ¡Notwithstanding he may have been at times of this opinion, it could not have been a very well-settled one, for he must at the same time have realized that there was a liability of his being charged as trustee for this estate, because when he received it he receipted therefor as trustee and his acts all through the management of the estate were inconsistent with this opinion. This is evident not only in his dealings with others, but with his wife in relation thereto. Also in Exhibit -27 he takes credit to himself for the amount of his commissions and expenses as trustee. So, too, the note which he took from his wife to balance the trust estate as shown by Exhibit 27 was made payable to “John ¡R. Putnam as Trustee under the will of It. M. Shoemaker, deceased,” the body of this note being written by the clerk of Judge Putnam under his direction and the note itself being signed-by her and-delivered to him. It is clear, therefore, that notwithstanding t-lie opinion expressed by Judge Putnam in Exhibit 27 to the contrary, both he and-his wife regarded the property received from her father’s estate as held in trust. That being their understanding, and it having been so decided by the interlocutory judgment, the principal, question to be determined now is as to the amount of "the trust estate.
We agree in many respects with the conclusions of .the learned trial court, but we will content ourselves in' this opinion witli discussing only those, features of the case where we are compelled- to differ from such conclusions.
In the first place we are convinced, notwithstanding the very able and ingenuous argument of the learned counsel representing Mrs. Putnam’s estate to the contrary, that the Statute of Limitations does not stand in the way of the consideration of any question arising iri the case on it's merits. This defense had not been interposed at the time of the former trial but was first put in by the defendant Pendrick, as administrator with'the will annexed of her estate, who was brought into the action in 1905 in the place of the late Charles II. Sturges, who was the executor of her will. It is sought by this defense to save her estate from liability for such j>arts of the-principal of the trust estate.as came to her hands more than [475]*475six and more than ten years before the action was commenced both the six and the ten-year Statutes of Limitations being pleaded. Under the will of her father, as construed by this court in this action, the plaintiff and his two brothers became upon the death of their mother the absolute owners as tenants in common of the property given to Judge Putnam in trust for the benefit of his wife for life. The Court of Common Pleas of Hamilton county, O., in an action brought for the construction of this will, -in which Judge and Mrs. Putnam and their three children were. parties, in 1887 made a decree to the same effect. It was thus established that all the property received by Judge Putnam pursuant to the 18tli clause of the will of his wife’s father was trust property; that he held the legal title thereto as trustee ; that he so held it for her benefit until her death, and that upon her death her three children became the absolute owners thereof in equal shares by virtue of the will. The children had no right to its possession or enjoyment so long as their mother lived. It was not payable to them until her death. It would be a strange rule for the administration of trust estates to hold that when the trustee because of his belief, mistaken or otherwise, that the trust was not valid or effective, permitted the life tenant wrongfully to take the legal title to the trust' estate without the knowledge, of the remaindermen so far as appears and hold it for a period long enough for the ten-year or the six-year Statute of Limitations to run, the remainderman,, who begins his action before these statutes have run against him, is powerless to compel a restoration of and an accounting for the trust estate.
The Statute of Limitations does not begin to run until a cause of action accrues. This action was commenced, it is true, before the deatli of the life tenant, but by reason of her death soon thereafter it has become practically an action to compel the turning over of the trust estate to the equitable owners thereof.
Under the circumstances presented here we do not think the statute began to run against the plaintiff or his brothers until the death of their mother. Gilbert v. Taylor (148 H: Y. 298) is an authority for this conclusion. There the income of $10,000 was given to a person for life and upon her death said s'um was given to her sister. An infant son of the testator was the residuary legatee. The life beneficiary was appointed his testamentary guardian and a general [476]*476guardian was appointed, to act in conjunction with the testamentary guardian. The guardians compelled the executors and trustees under the will to account and obtained a decree, requiring the - executors to transfer and turn over the estate in their hands to the guardians. The guardians paid the interest on the legacy to the life beneficiary for four or five years and after that time paid her a gross sum which enabled her to realize the interest. Shortly after the death of the life tenant the remainderman brought the action against the residuary legatee to whom the surviving guardian had paid the residue of the estate.charged with the burden of the legacy. The Statute of Limitations was set up in defense and -it.was urged that the plaintiff’s legacy had vested at- testator’s death and that more than ten years had elapsed since the cause of action accrued.. It was held that although the legacy vested at the death of the testator, it did not become payable until the death of the life beneficiary and not until then did the cause of action arise and that the defense of the Statute of Limitations was, therefore, properly overruled.
To the same effect is Zee v. Horton (104 N. T. 588).
In Perry on Trusts (5th ed. § 245) it is said“ A person may become a trustee by construction, by intermeddling with, and assuming the management of property without authority. Such persons are trustees de son tort. * * * During the possession and management by such constructive trustees they are subject to the same rules and remedies as other trustees; and they cannot avoid their liability by showing that they were not in fact trustees, nor can they set up the statute of limitations.”
The cases cited in support of a contrary-doctrine have no force as applied to the facts of this case for in none of them was' the statute sought to be interposed in favor of the life tenant against the remainderman" in a case where as here the life tenant without the knowledge of the remaindermen improperly took the legal title to the trust property to herself well knowing its character as such.
In the next place we think the court erred in holding that the Sibley Manufacturing Company stock, the Langley Manufacturing Company stock and the Augusta Factory stock did not belong to the trust estate, but to the estate of Mrs. Putnam. The Augusta Factory stock was included by Judge Putnam in Exhibit 27 as property received from the Shoemaker estate and on" hand, and [477]*477the Sibley Company stock and the Langley Company stock was included by him in suplí exhibit as property of the estate disposed of by him, the former for $11,448 and the latter for $2,130, so that it is apparent that he at least regarded these stocks as belonging to the trust estate.
The Sibley stock and the Augusta stock were shares in Georgia companies and the Langley stock was shares in a South Carolina company. Those stocks belonged to Robert M. Shoemaker at the time of his death and the claim is that under the laws of Georgia and South Carolina these stocks were real estate and that because the laws of those States required three witnesses to a will of real estate, and as the Shoemaker will had only two, none of these stocks passed under the will, but, as to them, the testator died intestate, and Mrs. Putnam received them as hers absolutely as one of the heirs at law as undevised real estate. It is further claimed that under the laws of Georgia shares of stock of mining and manufacturing companies, whose principal investments are in real estate and machinery attached thereto, are deemed real property and under the laws of South Carolina a will is utterly void unless subscribed by three or more witnesses.
There appears to be no proof. in the case that in 1887, under the laws of South Carolina, the stock of a corporation owning real -estate was deemed to be real estate, nor is there any proof that either the Langley, the Augusta or the Sibley companies had their principal investments in real estate and in machinery attached thereto, so that the case is entirely wanting in evidence to make these stocks anything other than personal property which would pass by the laws of the domicile of the testator under his will. Nothing appearing in this record to show that these shares were real estate in 1887, the usual rules must apply and they must be deemed to be personal property, and as such were governed by the laws of Ohio, where the testator had his domicile. That being so, a good title to these stocks passed to the trustee under the will.
The fact that it was deemed necessary to go into the courts of South Carolina and Georgia and take proceedings for the purpose of procuring the transfer of the legal title to these stocks cannot alter the case or change the rights of these, remaindermen, for they were not parties to either proceeding. Nor was Judge Putnam a [478]*478party to the proceeding in Sbtith Carolina in his capacity as trustee, but only as an individual. • In the Georgia proceeding Judge Putnam appears to have admitted service of process as trustee, but both proceedings were apparently conducted by the consent of the parties thereto and as a convenient method of securing a transfer ■ of the legal title of the securities, and there was no attempt in either to have determined the rights of the beneficiaries of the trust as between themselves or between them and the trustee. If there had been, all the beneficiaries would have been necessary parties in order to be bound, and the trustee in such case does not represent the beneficiaries. (Matter of Btraut, 126 H. Y. 201; Carey v. Brown, 92 IT. S. 171.)
We' think, therefore, that these stocks stand in no different relation to this estate than the other securities which were received by Judge Putnam as a portion thereof, and that the Augusta stock which is now on hand should be divided equally among the remaindermen. The proceeds of the sale.of the Sibley and the Langley stocks were reinvested in other stocks now on hand and in that way are to- be- also so divided.
■ Again, we are of the opinion that the Delaware and Hudson Oanal Company stock and the stock of the Central Bailway of Hew Jersey, which were found in the Lincoln Safe Deposit box standing in the name of Mrs. Putnam, should be regarded as part of the trust estate. It is true that neither of these stocks ever belonged to the testator Shoemaker, but that they were purchased after his death. They are each specified by .Judge Putnam in Exhibit 27 as property purchased or held in place of that disposed of, It is entirely clear outside of Exhibit 27 .that it requires both of them to make the trust estate good for the devastavit existing therein,- and it seems reasonable to believe that both were purchased with trust money. It appears that Putnam place, which stood in the name of Mrs. Putnam, was destroyed by fire, and that in January, 1891, $25,000 of insurance moneys for such loss were received and deposited in the joint bank account of Judge and Mrs.-Putnam ; that certain Hew York Central stock "was soon thereafter purchased and the amount- thereof paid for from the proceeds of such fire insurance in a check drawn by Judge Putnam upon such bank account; that the Hew York Central stock was thereafter sold and [479]*479these 290 shares of Delaware and Hudson Canal Company stock purchased in place thereof and paid for upon a like check. If we stopped here there would be much better foundation for the claim that the Delaware and Hudson stock belonged equitably and legally to Mrs. Putnam, but in 1892 Putnam place was rebuilt, the title thereof still being in Mrs. Putnam’s name, and an amount in excess of the $25,000 ' insurance money was drawn from this same bank account in which the insurance moneys had been deposited and used in rebuilding and refurnishing the house, and in that way Mrs. Putnam received back to herself an amount exceeding the amount of the insurance moneys. So that the fact that this insurance money was first temporarily applied to the purchase of the Hew York Central stock and afterwards, upon the sale of that stock, to the purchase of the Delaware and Hudson stock is of no importance, for it leaves the purchase price of the Delaware and Hudson stock as having been taken from other funds than the insurance moneys, and such moneys were drawn from the joint account, where the moneys belonging to the trust estate as well as to Judge and Mrs. Putnam individually had been kept and intermingled by them. The court has found that there is no evidence that any of the stock of the Central Bailway of Hew Jersey was purchased with trust funds. It is also true that there is no evidence that it was not purchased with such funds. There is a finding that thirteen shares of it were purchased by Judge Putnam with his personal funds and the certificate therefor issued in his wife’s name. There is also a finding “ that after the purchase of the said Delaware & Hudson Canal Co. stock and Central Bailroad of Hew Jersey stock, John B. Putnam received all dividend checks on each of the said stocks respectively down to the time of his death, the same being payable .to Mary S. Putnam, and the said stocks were found after his death in a safe deposit box leased by'liim and Mary S.
■ Putnam.” The fact that these stocks were taken in Mrs. Putnam’s name is not of much force in view of the further facts that so'large a portion of the trust estate was also so taken directly from her father’s estate and so held during the life of the trust. .This course of conduct cannot serve to deplete the trust estate to the prejudice of the rights of the remaindermen.
We think it the duty of a court of equity to exert itself to pre[480]*480serve the trust estate intact, and where the relations of the trustee and the life beneficiary to each other and to the trust estate were such that each must have, been fully advised of all the acts and dealings of the other with relation thereto, and where there has been such a commingling by them of the trust moneys with their individual funds as appears here, and no rights of creditors or other equities of innocent third parties intervening, we should hold that the burden is cast upon the representatives of the trustee and the life beneficiary to show clearly that these stocks were purchased with her money and not with that of the estate, and that they equitably belonged to her. That has not been done in this case.
There should, too, we think, be a recovery against the estate of Mrs. Putnam for the benefit of the trust estate in the amount of $7,091 and interest for that amount of trust funds found by the court to have been applied in 1892 for improvements on Putnam place. This recovery was denied by the trial court on the ground, that it was barred by the Statute of Limitations, which conclusion, as hereinabove stated, we think was erroneous.
Finally, we think the court should have allowed a recovery 'against the estate of Mrs. Putnam upon her. note for $36,987 and the.interest thereon from the date of her death. This was made payable to Judge Putnam as trustee, and was evidently given as a settlement for that amount of shortage in the trust estate which she had received to her own use and over and above the securities on hand. It requires the entire amount of this note to make the trust estate good for the devastavit, that has been occasioned. - When it appears, as it does here, that many of the securities that belonged to the trust estate stand in Mrs. Putnam’s name, and a large amount thereof was sold from time to time which would necessarily require her personal knowledge of the transaction, and that the riioneys received therefor were received by her and her husband and deposited in a joint bank account kept in both of their names, and when, as a result of it all, just before leaving upon a long journey with her husband, from which he never returned, the note in question was given to him as trustee and given for valué received, we see no reason why her estate should not be chargeable with the amount thereof for the benefit of the remaindermen of the trust estate when her conduct and that' of her husband acting together in the man[481]*481agement of sncli estate had caused it to be diminished, in some unexplained way, to the amount of such note.
When Mrs. Putnam received in her own name the securities from her father’s estate which belonged to the trust, and when she received and purchased other securities "with the avails of those disposed of, she received them with full knowledge of the trust and its conditions, and, therefore, any disposition or holding thereof contrary to the purposes of the trust was unlawful. She became, by her conduct in so receiving and disposing or holding these securities, a trustee by her own wrong in relation thereto, and she -should be held liable for a note which she has given apparently to make amends to the trust estate for the amount of the shortage caused, in part at least, by her management thereof.
The Special Term decided that the estate of Mary S. Putnam, ■deceased, was liable for the sum of $68,410, the amount of the proceeds of. the sale of $61,700 par value of certain securities standing in her name and which were received from the estate of her father. We think it is apparent from this record that the amount of receipts for these sales were in turn used in the purchase of the new securities now on hand and which we think must be divided among the remaindermen as part of the trust estate. That being so, her estate should n.ot be charged with the amount and also with her note, given as we believe to balance the trust estate, for if that were done there would be a double charge against her. The judgment must, .therefore, be modified accordingly. So also the judgment as against the estate of Judge Putnam should be modified so that there shall be a recovery against it only of any deficiency remaining in the trust estate after taking into the account the property here found to belong to it.
The judgment should be modified in accordance with this opinion and as modified affirmed, with costs against the' appellant Israel Putnam and the representatives of the estates of Judge Putnam and of Mary S. Putnam in favor of the other parties who have filed briefs upon this appeal.
All concurred, except Cooheane, J., who dissented in part in memorandum.