In re the Accounting of the Executrix & Executor of Martens

Two questions are presented by the special guardian for determination before the entry of the decree:

First. Is the real estate to be included' in determining the value ' ■ of the several trust estates for the purpose of computing trustees’ commissions thereon; and

Second. Are the taxes upon the unimproved and unproductive real estate which is appreciating in value properly chargeable to principal?

The testator by the fourth clause of his will gave to his executors and trustees all the residue of his property, real and personal, in trust to divide the same into five equal parts, which they were directed to invest and reinvest in productive real and per; sonal property, to receive the rents, income and profits of each of "" said shares, and after deducting the necessary and proper taxes, insurance, premiums, expenses or repairs, commissions, Costs, charges and expenses, to use and apply and pay the net rents, income and profits of one of such shares to each of his' five children during life, and upon the death of any of such children the share represented by the child so dying to be paid to his or her issue, or in default of issue to his or her brothers and sisters- and the issue of any deceased brothers and sisters. In a subsequent paragraph of the will full power of sale was given to the exec-. Utors and trustees..

' Under the provisions of this will the persons named as executors take the legal title to the real estate, coupled with a Complete power of sale, but the title is in them as trustees and not as executors. Whether they are to act- in' reference to the real estate as executors or trustees is "determined by where the legal , title is. Executors as such deal with réal estate only under a power in trust, and if they are seized of the" legal estate they then hold as trustees. Griffith v. Beecher, 10 Barb. 432 ; Matter of Van Wyck, 1 Barb. Ch. 565 .

Executors who are merely given a power in trust to sell real estate have no care or responsibility in respect thereto, neither, have they any right to the rents and "profits' thereof-nor possession

The rule is well settled and wisely so, for- experience proves that the care of real estate is much more onerous than the care of personal property. The personalty of each of the five trusts being accounted for is considerably less than $100,000, but adding the fair market value of the realty, that amount is largely exceeded. The executors named are, therefore, lawfully entitled as trustees to their commissi on a for receiving the corpus of the several trusts, their accounts as. executors having been heretofore settled.

We are next brought to the consideration of the second question. It appears that the testator died possessed of certain unimproved and unproductive real estate in the city of Mount Vernon, which has been set off and partitioned among the several trusts, and which real estate is appreciating in value, and which the trustees believe by holding for a time can be sold at much larger prices than can be had for it at the’present time. In view of the almost certain advance in its value and the benefit to the remainderman consequent upon holding it, the trustees have charged the taxes thereon to principal and not to income, as is usual. The correctness of this is involved in some doubt. It is the general rule that assessments or taxes in the nature of assessments for betterments to the freehold are chargeable to principal, the life tenant suffering the loss of the interest on the amount thereof. In some cases, however, when the benefit is partially for the permanent benefit of the freehold and partially for its preservation or temporary benefit, the amount of such assessments have been apportioned between the life tenant and remainderman.

It is also the general rule that all ordinary taxes for the support of the government must be borne by the life tenant. Hepburn v. Hepburn, 2 Bradf. 74 ; Griswold v. Griswold, 4 id. 216 ; Pinckney v. Pinckney, 1 id. 269; Booth v. Ammerman, 4 id. 129; Gillespie v. Brooks, 2 Redf. 349.

, The soundness of the latter rule cannot be questioned, but that it is of universal application and without exception I am inclined

;And for this there is some authority. Cram v. Cram, 2 Redf. 244; Matter of Kendall, 4 Dem. 133 ; Matter of Housman, id. 404;

...In the latter case Surrogate Rollins held that where property, which ought to he converted- is held by executors, a tenant for life is.not entitled to the annual produce, hut to interest at some fixed rate upon the estimated value of the unconverted property or upon the. :yalue as it may be subsequently ascertained, and cites as authority . for the rule, Covenhoven v. Shuler, 2 Paige, 122; Cairns v. Chaubert, 9 id. 160 ; Spear v. Tinkham, 2 Barb. Ch. 211 ; Lawrence v. Embree, 3 Bradf. 364 .

. --..The learned surrogate also said; ■ “ Delay -in making the conversion directed by the will should not inure to- the advantage of the beneficiaries for life as' against the remaindermen or to the advantage of .the latter as against the former, hut to the advantage .of- :the estate as a whole, and the equities should be adjusted between the successive takers,” and cites Beavan v. Beavan, L. R., 24 Ch. D. 649 ; People ex rel. Cornell University v. Davenport, 80 Hun, 177 .

It must, be borne in mind that the intention of the testator in such a case as this is to benefit Ms children, the., life tenants, who. are his first consideration, ‘ and the., fact that he leaves the estate in. trust, and gives-to his children only the income, is not so much because he desires their issue, in whom he may have no particular interest, to be benefited, hut that Ms children shall always have support and maintenance and something to constantly' remind them of .a provident parent. It never could be. that a father should intend that his children should live in discomfort and distress- in order that unproductive and ' speculative real estate, may he held to appreciate for the benefit of a third or fourth generation, and yet such might wéll happen if the general rule stated above is without exception. ■ The Surrogate’s Court being a court of equity, it must see that equity is done and that the clear intentions- of a- testator are fulfilled, and where it appears that • unproductive and unimproved real estate having - á prospective

Both propositions ■ must be answered in the affirmative and a decree entered accordingly.

Decreed accordingly.