Case Name: John F. Patterson, as Trustee under the Last Will and Testament of Marshall O. Roberts, Deceased, Respondent, v. Susan L. Vivian, Individually and as Trustee under the Last Will and Testament of Marshall O. Roberts, Deceased, Appellant, Respondent, Impleaded with Mary M. Roberts and Evelyn Van Wart, Respondents, Appellants, and Marshall O. Roberts, Respondent
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1910-04-08
Citations: 137 A.D. 596
Docket Number: 
Parties: John F. Patterson, as Trustee under the Last Will and Testament of Marshall O. Roberts, Deceased, Respondent, v. Susan L. Vivian, Individually and as Trustee under the Last Will and Testament of Marshall O. Roberts, Deceased, Appellant, Respondent, Impleaded with Mary M. Roberts and Evelyn Van Wart, Respondents, Appellants, and Marshall O. Roberts, Respondent.
Judges: 
Reporter: Appellate Division Reports
Volume: 137
Pages: 596–610

Head Matter:
John F. Patterson, as Trustee under the Last Will and Testament of Marshall O. Roberts, Deceased, Respondent, v. Susan L. Vivian, Individually and as Trustee under the Last Will and Testament of Marshall O. Roberts, Deceased, Appellant, Respondent, Impleaded with Mary M. Roberts and Evelyn Van Wart, Respondents, Appellants, and Marshall O. Roberts, Respondent.
First Department,
April 8, 1910.
Will — life estate to widow with residuary estate in trust—direction that trustee pay taxes on widow’s life estate — equitable reconversion — terms of will binding although. there is subsequent sale of life estate — when trustees not liable for loss sustained on foreclosure — payment of personal tax by non-resident trustee —repairs to property held on separate trust.
Where a testator gave his wife a life estate in certain lands and in the furniture in the houses thereon, with remainder over, and provided that from the residue Of the estate given to his executors in trust they shall keep the real property given to the widow in repair and insure it together with the personal property, and shall pay all the taxes and assessments thereon, so that the wife shall not be at any expense on account'thereof, and subsequently in amicable actions between all parties interested it was adjudged to be for the best interests of the estate that the land and personal property in which the widow had a life estate be sold together with the lands held in trust by the executors, and the proceeds be invested by. them, the income tobe paid to the widow for life, the widow by joining in said actions did not release her life tenancy," but merely consented that the proceeds of the sale be substituted for the land itself. Hence, the provision that the taxes be paid out of the residuary estate held in trust by the executors remains in force and entitles the widow to enjoy her life estate free from taxes.
Where testamentary trustees haying a discretionary power of sale, after holding the lands, sold them at an increased value, the appreciation is not income payable to the ceatuis que tru'itent
Where testamentary trustees having a power of sale sold lands and invested a portion of the proceeds in a mortgage on- other lands which they were- subsequently compelled to buy in on foreclosure and enter an uncollectible judgment for a deficiency, the loss sustained should not be apportioned between the .principal and interest, nor-should there be a division of the prospective profits of a sale of the lands bought on foreclosure where such sale has not yet taken place.
Where testamentary trustees, -believing it to.be for the best interest of'the estate, pay personal taxes assessed against them, although one is a non-resident, ' they should not be charged with the unnecessary payment if a refusal might have resulted in an increase of the assessment.
Where a testator did not direct his trustees to make repairs upon household furniture, the, subject of a separate and independent trust, they are not justified in using either the principal or income from the general estate for that purpose.
Miller and "Clarke, JJ., dissented in part, with opinion.
Cross-appeals by the defendants, Susan L. Vivian, individually and as trustee, etc., and Mary M. Roberts and another, from a final judgment of the Supreme Court, entered in the office of the clerk of the county of New York on the 17th day of July, 1909, upon the decision of the court rendered after a trial at the New York Special Term.
Bébden Bacon, for the defendant Vivian.
George A. Strong, for the defendants Roberts and Van Wart.
William, W. Ladd, for the respondent Marshall 0. Roberts.
Henry Thompson, for the respondent Patterson.

Opinion:
Scott, J.:
I concur entirely with the opinion of Mr. Justice Miller except as to the payment of the taxes upon two funds which have been designated throughout-the case as1 the " Homestead Fund " and the " Furniture Fund." Both of these funds arose from the sale of, property which the testator gave to his widow, the defendant Susan L. Vivian, for life. The gift is expressed in the 2d clause of the will, which reads as follows :
" Second. I give and devise to my beloved wife, Susan Lawrence Roberts, the use and enjoyment for and during her life of my two houses, now known as numbers 105 and 107 Fifth Avenue in the city of New York, and now occupied by me.as a family residence,
with the stable and lots of ground used and occupied therewith, on East Eighteenth Street, in the rear of said houses. I also give and bequeath to my beloved wife, Susan Lawrence Roberts, for arid during her life, all the household furniture, useful and ornamental, of every kind and description, books, pictures, gold plate and silver plate and jewelry that shall be in my houses aforesaid at the time of my decease; and also all my horses, carriages, harness, saddles, bridles, blankets and articles provided for use in. the stables in the care of the horses, or with the horses and carriages."
If the language of this clause left any doubt as to the nature and extent of the interest thus given to the widow (whicli I do not suggest), such doubt was finally and conclusively resolved and determined, so far as concerns the parties to this action, by the several judgments dated respectively June 22, 1896, March 9, 1899, and March 5, 1900. The first-mentioned judgment authorized the sale of a portion of the personal property referred to in the foregoing-paragraph of the will, and the two last-mentioned judgments authorized a sale of the real estate mentioned in said paragraph. It is true that in neither of the actions in' which those judgments were entered was there in terms a prayer for the construction of the will, nor did either decree in' terms construe it, but the form of the judgments, the relief granted and the disposition made of the funds derived from the sale of the property imply inevitably a holding by the court that the testator had given to his wife a life estate in the real estate and personal property mentioned in the 2d paragraph of his will, and not merely a right to use and occupy the property. Indeed in other paragraphs of the will, notably in the 5th and 9th, the testator distinctly designates the estate given to his wife in the house and furniture as a " life estate." The remainder of the estate, after some legacies, and the. gift of the life estate to his wife, the testator gave to his executors in trust, with directions to hold it and apply the income as in the will directed, and in considering the question I am now discussing it is well to keep constantly in mind that the will cut out and segregated the life estate given to his wife, and that all that passed to the trustees was so ' much of the testatoris estate as was left after the life estate had been set apart. The gift of the life estate carried with it the right of the possession of the property to which it was attached, subject only to propér security or other provisions to insure the integrity of the remainder when the life estate terminated. Upon his general estate, bequeathed to. his trustees, the testator imposed several charges for the benefit of his wife. Among other things he directed his trustees, by the 5th paragraph of the will, out of the estate and the rents and profits thereof (thereby meaning the estate given to the trustees) to keep the house in proper repair, and to keep the houses and stables and personal property insured in a proper amount "so that my said wife shall not be at any expense on account thereof." He then provided as follows: "And I direct my said Executrix and Executors to pay all taxes and assessments which may be assessed upon or be chargeable upon the said real estate and upon the pictures and other personal property in the said houses and stables daring the same time." The property thus enumerated upon which taxes and assessments were to be paid was the property in which the wife was given' a life estate, and the " same time," during which such taxes and assessments were to be paid, was the lifetime of the wife. So the effect of the will was that the wife was given a "life estate in certain specified real and personal property, and the" general estate was charged with the payment of the taxes and assessments upon said property during the continuance of the life estate. After some years the testator's widow remarried and went abroad to live, and the conditions surrounding the real estate so changed that it was more valuable and desirable as a site for a business building than for a private dwelling. In order to remove any doubts as to the authority of the trustees to sell the real estate an action was begun to which the same persons were parties as are parties to this action, and resulted in a judgment authorizing a sale of the property. It was provided in the judgment that the executors and trustees of said decedent should invest the proceeds of the sale and pay over the income of said investments to testator's widow, then Susan L. Vivian, for and during her life. A second action of the same general nature was commenced and prosecuted to judgment for the purpose of. making certain possible remaindermen parties to the judgment. The property was accordingly sold and the proceeds invested in bond and mortgage. Since the testator's widow, at this time, owned absolutely a life estate in the property which she could have sold, but could not be compelled to sell, it is manifest that no sale of the entire property, life estate and reversion together could be made without her assent, and that assent she gave upon condition (as was afterwards provided by the judgment) that "the proceeds thereof can be invested and the income therefrom paid to her during her life." Under these circumstances it seems to me to be clear that there was neither a sale, nor an abandonment, nor a release the widow's life, tenancy, but merely the substitution, by common consent, of the proceeds of real estate for the real estate itself, and that the widow retained precisely the same estate with respect to the substituted fund that she had held' and enjoyed with respect to the real estate. If so I can see no reason why the provision for the payment of taxes thereon out of the general estate is not still applicable. The testator's purpose was that his widow should enjoy her life estate free from taxes. He may or may not have anticipated the possibility that the form of the property to which the life estate attached might be-changed. That seems to me to be immaterial. At all events it has legally been changed, but if the life tenant is now required to pay the taxes but of the income she will be realizing less than the testator gave her. The order appealed from and the. opinion of my brother Miller proceed upon the theory that by consenting to the sale of the real estate, and the intrusting, of the proceeds to the same persons who are trustees under the will, the widow relinquished her position as a life tenant, and became merely a cestui que trust of the fund derived from the sale of the property. With tliis view I am unable to concur. It finds its sole support in the fact that the persons designated to hold the principal fund during the continuance of the life- tenancy were the executors named in the testator's will. This choice was doubtless dictated by motives of convenience, but the court might equally well have selected another Custodian. If it had the present question would not have seemed difficult. The purpose of intrusting the fund to the trustees was not to throw the whole fund into the general estate, freed from the widow's life estate, and the judgment does not so provide, The only purpose was to preserve the principal so that when the time came it should be available for distribution to the remaindermen. I ain, therefore, of the opinion that the 5th clause of the will still remains operative and casts upon the general estate the burden of paying the taxes, if any there be, levied upon the fund of $500,000 in which the defendant Vivian has a life estate.
Indeed I am by no means satisfied that this fund has ever been taxed. The personal taxes, apart of which is sought to be imposed upon the " Homestead Fund," are assessed against " Jph-n F. Patterson and Susan L. Vivian as Executors and Trustees, Estate of Marshall O. Roberts." If I am correct in .the views already expressed that the " Homestead Fund " is held by Mr. Patterson and Mrs. Vivian, as custodians appointed by the court, and not as executors and trustees under the will of Marshall O. Roberts, and that the fund, or at least Mrs. Vivian's life estate in it, constitutes no present part of the estate of the testator, it is not included in terms in the assessment, and as the assessable estate, outside of the " Homestead Fund," is much larger than the amount of the assessment, there is no presumption that that assessment included the " Homestead Fund."
The same considerations lead to the conclusion that the income of the general estate should bear and pay the taxes and insurance upon the property in which the " Furniture Fund " lias now, perforce, been invested. The will, however, does not provide for payment by the general estate of the necessary repairs upon the furniture and personal property and such repairs upon the property representing the furniture should not be charged against that estate.
The judgment appealed from should, therefore, be reversed, with costs and disbursements to all parties payable out of the estate, and the matter remitted to the Special Term to recast the accounts in conformity to this Opinion.
Ingraham, P. J., and Laughlin, J., concurred; Clarke and Miller, JJ., dissented. '