Court Opinion

ID: 6584394
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:41:09.792025+00
Date Added: 2024-06-11T15:57:24.784615
License: Public Domain

Baldwin, J.
It was the duty of the trustee to protect his interest under the Iowa mortgage. He was properly allowed to deduct from the income otherwise payable to Dr. Wordin, the amount of his reasonable expenses in prosecuting the foreclosure suit brought by his predecessor and pending at the ■ time of his appointment, as well as for those incident to his personal investigation of the mortgaged property and of that which had been offered to him in exchange for it. They were expenses attending the administration of the trust in ordinary course; and ordinary expenses of administration are properly deducted from the fruits belonging to the party in immediate enjoyment of the equitable estate. That these were large, either as considered by themselves or in comparison with the value of the mortgaged property, did not tend to prove that they were of such an extraordinary character as to make them a charge on the corpus of the trust estate. Evidence to that effect would have been pertinent, as was intimated by the trial court, to show that the expenditures should not have been made at all, because the asset was not worth what it would cost to protect and preserve it; but none was offered having such a purpose in view. It is the nature, object and result, rather than the amount of an expenditure, which usually determines whether it is chargeable to a life tenant or to the remainder-man. However large, if properly and reasonably incident to the management of the estate in behalf of the party equitably entitled to the accruing income, and not resulting in a direct increase of the principal fund, nor in substitutions which vary the items of which that is composed, a trustee’s charges and disbursements are, under ordinary circumstances, payable from its income, if that be sufficient for the purpose, *538unless it be otherwise provided by the terms of the trust. Guthrie v. Wheeler, 51 Conn. 207.
The same considerations, in the main, apply to the assessment for an asphalt pavement in Bridgeport in front of land belonging to the trust. The trustee was under a legal obligation for its payment. Nichols v. Bridgeport, 23 Conn. 189; General Statutes, § 3901. Had the improvement been shown to be of a permanent character, an equity might have arisen to an apportionment of the expense between the life tenant and the devisee in remainder, or for decreeing the payment of the lien out of the principal of the fund, and an annual charge thereafter of the interest on such payment against the income otherwise going to Dr. Wordin. Plympton v. Boston Dispensary, 106 Mass. 544. But in the absence of evidence to show that this particular pavement had especial qualities of durability, the Superior Court might properly take judicial notice of the usual effect of time and use in our climate upon asphalt on the streets of a populous city. The life tenant is a man of middle age. The tables of mortality indicate that he may outlast the pavement, and the added value which it gives to the land be entirely exhausted in increasing the income which he enjoys. Remainder-men are not ordinarily chargeable for uncertain and -conjectural benefits, which they may never receive.
The will under which the trust now in question was constituted contains nothing to vary the general rule. It is plain that a principal object of the testator was to provide for the ultimate accumulation of a fund of the value of a $1,000,000, for charitable purposes. This fund was to be kept forever intact, the income to be held back from time to time to replace losses, should such occur. The trust for his daughters was to terminate with their lives, and the half of the estate held for their benefit was to pass into the charitable bequest. Should either of his sons die without male issue, the share otherwise given to such issue was also to go in the same direction. The trust in favor of each of his four children respects only “ net ” income of the share set apart for that purpose. The prior trust in favor of his wife, under which *539she had the benefit for her life of the entire residuary estate, gave her the balance of the accruing “ rents, dividends and interest,” after payment by the executors of “ the legal taxes, insurance, and necessary repairs on the buildings, and their legitimate expenses.” These words may fairly be taken to indicate what the testator regarded as constituting “ net income.”
In creating the life estate in joint tenancy in favor of his daughters in part of the homestead, after his wife’s decease, he was careful to provide that his executors were “ to pay legal taxes and assessments thereon, and keep the same in repair, out of any funds belonging to my estate during said term.” Here “ assessments ” are classed with taxes and repairs as charges which it was necessary to meet in order to assure to the life tenants the “ free and unmolested use ” of the premises, and which were to be paid from the general residuary estate, whether they occupied the house as a residence for themselves, or let it and took the rent.
Had the offer of an exchange for the Iowa mortgage been accepted by the trustee, it may be that the property thus acquired to replace it would have been a proper subject of apportionment, and that it might have been equitable to charge the expenses of the Western trip in whole or in part upon the corpus of the trust. The same might have been true if the decree of foreclosure had not been set aside. But as things were, neither the decree nor the uneffected exchange brought anything new to the estate or added to its amount.
The appellant claimed before the Superior Court that it was the duty of the trustee to convert the defaulted mortgage into productive property at the expense of the corpus of the estate. This raises a question not in the case. The foreclosure may have been brought and prosecuted simply as the best means of exacting payment of the interest in arrears. There has as yet been no conversion of the security into any other form of investment. Should one be hereafter effected, the occasion will then first arise for determining, in view of all the attending circumstances, what equity may require. In re Tuttle, 49 N. J. Eq. 259, 24 Atl. Rep. 1; Greene v. *540Greene, 19 R. I. 619, 622, 35 Atl. Rep. 1042; In re Park's Estate, 173 Pa. St. 190, 33 Atl. Rep. 884. It does not now appear that any loss of principal has been incurred. It may be that the interest in default will yet be collected and the mortgage preserved intact.
There is no error.
In this opinion the other judges concurred.