Case Name: H. Russell Teel et al., Exrs., vs. William D. Hilton et al.
Court: Supreme Court of Rhode Island
Jurisdiction: Rhode Island
Decision Date: 1899-03-15
Citations: 21 R.I. 227
Docket Number: 
Parties: H. Russell Teel et al., Exrs., vs. William D. Hilton et al.
Judges: Present : Matteson, C. J., Stiness and Tillingliast, JJ.
Reporter: Rhode Island Reports
Volume: 21
Pages: 227–231

Head Matter:
H. Russell Teel et al., Exrs., vs. William D. Hilton et al.
PROVIDENCE
MARCH 15, 1899.
Present : Matteson, C. J., Stiness and Tillingliast, JJ.
(1) Wills. Trusts. General Legacies.
A testatrix made the following provision in her will: “The income to be derived from the $12,000 formerly secured to me by mortgage on the real estate on the southerly side of Broad street and the easterly side of Stewart street in Providence, which mortgage is now paid in part, and the income that may be derived from the proceeds of said mortgage, I give and bequeath to my said daughters I. and S. during the term of their natural lives, each of them to have for her own sole and separate use one equal half part of such income, and the same to be paid by my executors as often as twice in each year to my said daughters respectively and upon the sole and separate receipt of each of them. My said executors shall have power to change the investment of said sum at any and all times, and to sell at public or private sale the securities or property in which it may be invested and to re-invest the proceeds of any such sale in their discretion.”
The will gave pecuniary legacies to various legatees, and devised all the real estate specifically. At the time of the execution of the will she was possessed of personal estate equal to the amount of the legacies ; before her death the personal estate was reduced. By another clause of the will legacies to the amount of $12,000 were made payable after the decease of her daughters I. and S. above referred to,
Prior to tlie making of the will the testatrix received, a portion of the principal of the note secured by the mortgage, and invested it partly in a mortgage note and partly in real estate. She also acquired the equity in the estate mentioned in the third clause in exchange for the balance due on the mortgage note.
These investments were claimed by various legatees and devisees under different clauses of the will
Held, the effect of the third clause .was to create a trust with reference to the $12,000 formerly secured by mortgage on the estate therein mentioned. The duty imposed on the executors and the powers conferred on them were such as appertain to the office of trustees rather than of executors.
(2) Mingling of Trust Fund.
Held, further, the mere fact of depositing a trust fund in a bank where the trustee already had deposits was not in itself such a mingling of the trust fund as to prevent the tracing of it.
(3) General Legacies.
Held, further, the fact that legacies aggregating in amount the trust fund were given after the death of the tenants for life, in the absence of express directions that they should be paid out of the trust fund, was not sufficient to convert them from general to specific legacies.
Bill in Equity for instructions. Heard on bill and answers.

Opinion:
Matteson, C. J.
This is a bill for instructions. The conclusions to which we have arrived are as follows :
1. Our opinion is that the effect of the third clause in the will of Sarah P. Blake was to create a trust with reference to the $12,000 formerly secured by mortgage on the real estate on the southerly side of Broad street and the easterly side of Stewart street in Providence. The duty imposed on the executors to pay over the income to the daughters of the testatrix, Isabel and Sarah, during their natural lives, and the powers-conferred on them to change the investment of the fund at any and all times, and to sell at public or private sale the securities or property in which it may be invested and to re-invest the proceeds, are such as appertain to the office of trustees rather than" of executors. Grinnell v. Baker, 17 R. I. 44, 49.
2. The case shows that on August 16, 1889, the administrator on the estate of Alfred S. Potter, one of the mortgagors of the real estate on the corner of Broad and Stewart streets, referred to above, paid to the testatrix $7,500 on account of the principal of the note for $12,000 secured by the mortgage, and that on October 15th following she made deposits in the following banks in Providence : In the Old National Bank, $4,000 ; in the Peoples Savings Bank, $2,000 ; in the Citizens Savings Bank, $1,500 ; in the latter two of which she already had deposits.
That on December 24, 1889, she purchased a mortgage for $5,000 on the estate of John M. Dean, and on the same day withdrew from the Old National Bank the deposit of $4,000 and $875 from the deposit in the Peoples Savings Bank, which sums, with interest at the rate specified in the Dean mortgage, make up the principal of the mortgage of $5,000.
That on September 17, 1890, the testatrix purchased the Popple Cottage estate at Conanicut Park in Jamestown; that on the previous day she gave her note for $1,834.23, without interest, to P. A. Cranston, cashier, and pledged as collateral for its payment $1,000 of her deposit in the Peoples Savings Bank and $1,000 of her deposit in the Citizens Savings Bank, which sums were afterwards drawn by the payee of the note.
As there is no evidence to show the receipt by the testatrix of moneys from other sources between the payment to her of the $7,500 by the administrator on the estate of Alfred S. Potter, on August 16, 1889, and the deposits made by her on October 15th following, we think it is a reasonable inference that the moneys thus deposited, aggregating precisely $7,500, were the moneys so paid to her and a part of- the proceeds of the $12,000 mortgage. This being so, our opinion is that it is satisfactorily shown that the Dean mortgage and the Popple Cottage estate, for which $7,000 of the $7,500 were paid out of the moneys so deposited, are to be regarded as a part of the trust fund of $12,000 constituted by the third clause of the will. The mere fact that the testatrix already had deposits in the Peoples Savings Bank and the Citizens Savings Bank when she made the deposits in these banks mentioned above was not such a mingling of the fund with other prop-' erty of the testatrix as to prevent the tracing of the deposit as a part of the proceeds of the mortgage for $12,000.
3. The Popple Cottage estate having been purchased with a part of the proceeds of the mortgage for $12,000, and being a part of the trust property under the trust of the third clause, neither Florence B. Teel, the devisee under the fifth clause of the will, nor the residuary devisees, took any interest in that estate. Though the devise in the fifth clause to Mrs. Teel is of all the testatrix's real estate on the island of Oonanicut in Narragansett Bay, it goes on to specify of what that estate consists, and the Popple Cottage estate is not embraced within the specification, as indeed it could not have been, since it was not purchased by the testatrix until long after the date of the will. The devise to the residuary devisees is limited to the estate remaining after all the provisions of the will have been carried out.
4. The bill shows that subsequently to the payment of the $7,500 on the $12,000 mortgage the testatrix acquired the equity of redemption in the mortgaged estate on the corner of Broad and Stewart streets in exchange for the balance of $4,500 due on that mortgage. It further shows that the personal estate left by the testatrix, exclusive of the Dean mortgage, is insufficient for the payment of the general legacies given by the will, and that all of her real estate, except the Broad and Stewart street estate and the Popple Cottage estate, have been specifically devised. In this state of facts the questions arise whether the legacies mentioned in the twelfth clause of the will, which are made payable after the decease of the daughters Isabel and Sarah, are to be regarded as general legacies ; and, if the personal estate outside of the trust constituted by the third clause is insufficient for the payment in full of all the general legacies, whether they shall abate ratably with the other legacies. We think the legacies given by the twelfth clause are to be regarded as general legacies. The will contains no express direction that they shall be paid out of the trust fund created by the third clause, the income of which is paid to the daughters Isabel and Sarah, and the only ground for such a claim is the facts that these legacies aggregate $12,000 and are payable on the decease of the daughters. These circumstances can give rise, at most, merely to an inference that the testatrix expected that the payment of them would be made from that fund. But she also, when she made her will, equally expected that her personal estate outside of the trust fund would be sufficient for the payment of the other general legacies given in the earlier clauses of the will; and if these must abate, we think that all should abate.
We therefore answer the specific requests for instructions contained in the bill as follows :
1. That the income from the $5,000 invested in the Dean mortgage, the net income from the estate on the corner of Broad and Stewart streets, and the net income of the Popple Cottage estate, should be paid over to Isabel J. Hicks and Sarah E. Hilton during their natural lives.
2. That the complainants have power to manage the Broad and Stewart street estate and to receive the income and pay therefrom the necessary and proper expenses of management, accounting to Isabel J. Hicks and Sarah E. Hilton for the net income during their lives.
3. The executors under the third clause of the will have the power to sell the Broad and Stewart street and the Popple Cottage estates, or either of them, for re-investment, in their discretion.
4. The corpus of the trust fund, of whatever it may consist, remaining on the death of Mrs. Hicks and Mrs. Hilton, is to be applied to the carrying out of the provisions of the will, to wit, the payment in full of the legacies which may then remain unpaid in whole or in part ; and after all the provisions of the will have been carried out, whatever remains, if anything, will pass to the residuary legatees and devisees.
5. The Popple Cottage estate, as already stated, did not pass to Florence B. Teel under the fifth clause of the will.