Vernon v. D'Wolf

28 F. Cas. 1164

• Court: U.S. Circuit Court for the District of Rhode Island
• Decided: November 15, 1825
• Status: Published

Opinion

STORY, Circuit Justice.

The obvious intention of the testator was. that the United States stock held by him should, at his decease, stand bound as collateral security to make good any deficiency or depreciation that might take place by depositing the 20,-000 dollars’ legaey, given by him to the plaintiff, in the Bristol Institution for Sayings. That stock has been sold by the executors; and the sale is a manifest violation of the direction of the testator that it should remain in his name, which must mean, that it ■should remain until the purpose of the trust was fulfilled, that is, until the legacy sho'uld "become absolutely due by the arrival at age, or marriage, or death of the plaintiff. It is said by the defendants’ counsel, that the sale was involuntary, as the stock was paid off "by the United States; but that does not appear, and the bill charges it as a voluntary sale. Indeed a payment by the United States is a transaction wholly distinct from a sale, and in no .sense to be confounded with it. But whether the transaction were a sale or payment, in my judgment, the legal result will be the same. The proceeds of the sale or payment must stand charged in the hands of the executors with the same trusts as the original stock. I shall, therefore, direct a reinvestment to be made of the whole proceeds, subject to the authority and control of this court, for the purposes of the original trust.

. In respect to the interest accruing from time to time upon such original stock, or any future investment of it. in the shape of dividends or otherwise, I see no reason why it should not be paid over to the executors as an unappropriated fund for the general purposes of the will. It is not in terms, nor by fair implication, pledged by the testator in aid of. or as security for, the legacy of the plaintiff.

As to the other point, that the testator intended to secure to the plaintiff an interest 'of six per cent, on her legacy during her minority. &e.: and that the original stock was charged with mailing up any deficiency of such interest, I cannot say that I perceive any such intention in the will and codicils. By the second codicil the testator bequeathed a legacy of 20.000 dollars to the plaintiff, to be placed in her father’s hands, and directed so much of the interest thereof, as was necessary for that purpose, tó be applied to her maintenance. But what interest was to be appropriated? Certainly not any specific interest, but such as the 20,000 dollars might or would yield upon a due investment. There is no pretence to say, that upon this clause the estate of the testator would have been bound to make up any deficiency in the interest, if it should fall short of six per cent. The obvious intent of the third codicil was not to change the amount of this legacy, but the hands, by which it was to be administered. It is to be deposited in the Bristol Institution for Savings, and the interest accruing therefrom, which certainly must mean the interest or dividends which should be declared thereon by the Bristol Institution, is to be applied to her maintenance. But the testator foresaw that there might be a deficiency or depreciation of the capital of the 20,000 dollars, in consequence of this investment, either by losses or mismanagement; and, as he intended that the plaintiff should, at all events, on her marriage or arrival at age, receive 20,000 dollars, “equal to gold or silver,” he bound his United States stock as collateral security for the payment of that sum, and that only. He says nothing as to the amount of the intermediate interest, or any depreciation of it. though it is obvious that if the principal were depreciated, the interest would ordinarily share the same fate. The omission, therefore, to provide for the interest, is strong to show that he meant an ultimate security only as to the principal. And he seems to have thought that in no probable event the interest would be less than what might be necessary for the main-tenancc of the plaintiff, for he expressly provides for adding the surplus of the interest to the principal in the institution. Yet he has not pledged his United States stock for the payment of such surplus so added: but in terms only for the principal legacy of 20,-000 dollars.

■ Perceiving no clear intention of the testator that the legaey should produce six per cent, interest, or that the United States stock should be pledged for the deficiency; I am of opinion that the plaintiff is not entitled to any decree to this effect. Decree accordingly.