In re the Accounting of the United States Trust Co.

Headnote

Decedent’s estate —■ trusts — accounting ■—• apportionment bf proceeds of sale of stock between principal and income.

Matter of U. S. Trust Co. (Butler), 190 App. Div. 494 , affirmed.

Appeal from an order of the Appellate Division of the Supreme Court in the first judicial department, entered January 30, 1920, which reversed a decree of the New York County Surrogate’s Court settling the accounts of the substituted trustee under the will of Thereon R. Butler, deceased. Objections to the account were filed on behalf of two of the fife beneficiaries, which presented only one question for determination, namely, the proper disposition of the proceeds of the sale by the trustee of 2,100 shares of the stock of the Lake Shore and Michigan Southern Railway Company at the price of $500 per share, aggregating $1,050,000. The trustee credited the entire proceeds of this sale to the capital of the trust estate, and the life beneficiaries in their objections to the tiustee’s account claimed that' some portion of the proceeds of the sale should have been credited to income and paid over to the life beneficiaries. The matter was referred to a referee, who made a report sustaining in part the objections to the trustee’s account and directing the transfer from principal to income of $261,471, being $124.51 of the proceeds of each share of such stock sold by the trustee. The latter filed exceptions to the report and these objections were sustained by the surrogate and a decree entered settling the account of the trustee as filed, overruling the objections thereto and holding that the entire proceeds of the sale by the trustee of the said 2,100 shares of the stock of the Lake Shore and Michigan Southern Railway Company should be credited to the principal of the trust estate. The Appel

late Division reversed the decree of the Surrogate’s Court and directed the surrogate to enter a decree confirming the report of the referee.