Case Name: Matter of the Estate of Frank Hartley, Deceased
Court: New York Surrogate's Court
Jurisdiction: New York
Decision Date: 1915-05
Citations: 90 Misc. 534
Docket Number: 
Parties: Matter of the Estate of Frank Hartley, Deceased.
Judges: 
Reporter: New York Miscellaneous Reports
Volume: 90
Pages: 534–536

Head Matter:
Matter of the Estate of Frank Hartley, Deceased.
(Surrogate’s Court, New York County,
May, 1915.)
Trustees — testamentary — direction to pay general guardian accumulated income of trust funds.
Where testamentary trustees are directed to set apart as' a separate fund either money or securities, or both, sufficient in their judgment to produce a clear net income in a certain amount and pay the same from the time of testator’s death to a certain person six years of age for the purpose of his education until he becomes of age, the trustees will be directed to pay his father as general guardian the accumulated income of the trust funds, the trustees under the language of the will having no discretion in the matter.
Application by general guardian to compel trustees to pay net income of a trust fund.
Alexander & Green, for petitioner.
Speir & Bartlett, for M. Taylor Payne et al.

Opinion:
Cohalan, S.
This is an application by a general guardian of an infant to compel the trustees of a testamentary trust to pay to said general guardian the net accumulated income of the trust fund. The trust was created by the following provision of a codicil to the will-: ' ' I direct my executors hereinafter named to set apart as a separate fund money or securities, or both, sufficient in their judgment to produce a clear net yearly income of five hundred dollars ($500), and I give said fund to my trustees hereinafter named, in trust to pay the net income thereof from the time of my death, to Frank Hartley Shearer, son of Leander H. and Grace A. Shearer, for the purpose of his education, until the said Frank Hartley Shearer shall attain the age of twenty-one years." The infant is now six years of age. The infant's father is his general guardian. The trustees have in their hands income in the sum of $828.61, and ' ' are ready and willing to apply so much of said income " for the purpose of the education of the infant " as may be necessary and proper." The trustees do not deem it advisable to expend all of the yearly income for education when the infant is only six years old, but believe they should accumulate as much income as possible while the infant's educational requirements are few, in order to spend the money more advantageously when the infant is older. The general guardian contends that the Avill gives the trustees no discretion in regard to the amount to be expended, or the manner of expenditure of the net income, and that the accumulated income now in the hands of the trustees should be paid to the infant's father as his general guardian. Whether the trustees are given discretionary power in the application of the income, or whether they must pay the income to the general guardian, to be applied by him for the use and benefit of the infant, depends upon the language of the will. Matter of Fish, 45 Misc. Rep. 298. It is true that tfie words " apply " and " pay over " are considered equivalent and interchangeable in an inquiry as to the validity of a trust provision of a will. Moore v. Hegeman, 72 N. Y. 376. There is a vital distinction, however, between a direction to " pay " and to " apply," when the manner of expenditure is at issue and where there is a question as to whether the trustees or the general guardian should apply the income. This distinction is clearly and accurately stated by Mr. Surrogate Ketcham in Matter of Connolly, 71 Misc. Rep. 388. The language of this will is " to pay the net income." These words do not invest the trustees with any discretion. They import a gift of the income to the infant, and must be construed as a mandatory direction to pay the income to the infant. The only manner in which the income may be ordered paid t'o the infant is by payment to his general guardian, who is under ample bond. I do not find any holding a contrary view. In Matter of McCormick, 40 App. Div. 73; affd., 163 N. Y. 551, the will directed the trustees to " apply " the income for the benefit of the infant, and the court held that the trustees were given power to withhold some of the income. With the distinction in mind between " pay" and " apply," it is plain that this case is not an authority in favor of the contention of the trustees in this application. I am therefore of the opinion that under the language of the •will the net income now in the hands of the trustees must be paid to the general guardian of the infant, to be expended by him for the education of the infant under the order of the court.
Decreed accordingly.