In re the Judicial Settlement of the Accounts of Farrell

Majority

p. 97

In the Matter of the Judicial Settlement of the Accounts of William J. Farrell, as Executor and Trustee under the Last Will and Testament of Leocadie L. Farrell, Deceased, Appellant. Francisco L. Farrell and Others, Respondents.

First Department,

June 18, 1909.

Headnote

Will — trusts — life tenant — right of trustee who is also life tenant to excess of charges over rental value.

Where a testatrix after making certain small bequests gave the remainder of her estate, real and personal, to her executors in trust to “allow” to her husband for life the income and use. thereof, upon condition that he support and educate her children during ■ their minority, with remainder to said children, and 'the husband who was sole executor and trustee continued to live in a ■ house of which his wife died seized, he will not be allowed upon the judicial

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settlement of his accounts such an amount out of the corpus of the estate as the aggregate of interest, taxes, assessments and repairs exceeded the fair rental value of the property, although he sold the house for nearly double the amount paid for it by the testatrix.

It seems, that as the husband was sole beneficiary and sole trustee the trust was void, but if not absolutely void, the legal status of the husband when he chose to occupy said house was that of a life tenant, there being nothing as to the balance of the estate which required him to act as trustee.

Appeal by William J. Farrell, individually and as executor and trustee, etc., from a portion of a decree of the Surrogate’s Court of the county of Hew York, entered in said Surrogate’s Court on the 17th day of March, 1908, confirming the report of a referee and settling the accounts of the said executor and trustee.

George W. Wingate, for the appellant.

Edward J. McGuire, for the respondents, Francisco L. Farrell and others.

James Kearney, special guardian for Marguerite Farrell, and counsel for Leocadie Farrell, respondents.

Leocadie L. Farrell died in 1891, leaving five children, the. respondents herein, and her husband, appellant, William J. Farrell. She was possessed of certain personal property and certain real estate, and by her will, after carving out certain small bequests, she gave the remainder to her executors in trust to “ allow ” to her husband the income and use of all her estate during his life, on condition that he should support and educate her children during their minority, with the remainder to such children. The husband was named sole executor and trustee of ¿he will. - One parcel of real estate of which she died seized, and where she lived at the time of her death, ■ was known as the Washington Heights property. The husband continued to reside there with the children! of his wife by' a former marriage and by himself, except such as.chose to leave, until 1905, when the property was sold for $72,000, realizing a profit over what the testatrix had paid for it of over $40,000. A,t the time of the s death of the testatrix the property was mortgaged for $23,000, and

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the annual interest charges were $550, and the average taxes, assessments and water rates about as much more. In addition to these annual charges there were ordinary repairs made from time to time, consisting of carpenter work, plumbing, painting and such like, which the appellant paid. On his accounting as executor and trustee in the Surrogate’s Court, which was instituted by himself in 1906 and was his first accounting in any capacity, he asked to be allowed out of the corpus of the estate such amount as the aggregate of interest, taxes, assessments and repairs exceeded the fair rental value of the property. The learned surrogate refused to allow him any sum whatever, on the ground that he was a life tenant and had occupied the property and must personally pay all interest on incumbrances and taxes and repairs.

The testatrix by her will attempted to create a trust in favor of her husband during his life by devising and bequeathing all of her personal and real property to her executors in trust to pay such income to him, and then naming him as sole executor. Other executors were named, but to act only in case of his death. The husband was, therefore, sole beneficiary and sole trustee. It would seem, under the authority of Greene v. Greene ( 125 N. Y. 506 ) and Rogers v. Rogers (111 id. 228) and Woodward v. James (115 id. 346) and Losey v. Stanley (147 id. 560) and Brown v. Spohr (180 id. 201) and Haendle v. Stewart ( 84 App. Div. 274 ) that the attempted trust was void.for this reason. If the trust was void, and if he took anything under the will, he took only a life estate and hence he occupied only as a life tenant. But even if the trust was not absolutely void, the legal status of the husband when he chose to occupy the real property belonging to the estate was that of a life tenant. There was nothing as to the balance of the estate which required him to act as trustee. As executor he could collect the income and pay it to himself. In occupying the property which he chose to occupy, he was not in the position of a trustee holding unimproved real property with large prospective increase in value for the benefit of the remainder-men, the carrying charges of which were greater than the income. If he chose to occupy, it was his duty to pay the interest on the incumbrances and taxes and keep the property in ordinary repair, the same as any life tenant.

It follows, therefore, that the decree of the surrogate was proper

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and should be affirmed, with costs to all parties separately appearing and filing briefs herein, payable out of the estate.

Ingraham, McLaughlin, Laughlín and Scott, JJ., concurred.

Decree affirmed, with costs to all parties, separately appearing and filing briefs, payable out of the estate. •

Cases cited

Greene v. Greene 125 N. Y. 506 N.Y. 1891-02-24 p. 99