TRIAL- Continued.

715

PAGE.

Issue-joined by an answer returned because unverified, and subsequently
when the cause can be put on the calendar-stipulation
verified and re-served ·
as to the date of the issue.

-

See PRITCHARD v. NEDERLAND LIFE INS. Co. (No. 1)......
the death of the judgment debtor

-

Defect of parties in a creditor's suit ·
does not prevent the hearing of a demurrer alleging it.
See FIRST NATIONAL BANK v. WRIGHT.
Effect of admissions, made by one while acting as an attorney, against
him personally.

See LECOUR v. IMPORTERS & TRADERS' NAT. BANK..
The decision of the court below on conflicting evidence
turbed on appeal.

See BAIRD v. SHEEHAN..

Issues sent to the Trial Term ·

-

109

2

384

when not dis-

7

16

-the order must be specifically obeyed.

See CAMERON . NEW YORK ELEVATED R. R. Co..

Malicious prosecution — probable cause, a question for the jury.
See OWENS v. NEW ROCHELLE COAL & LUMBER CO....

Place of.

See VENUE.

...

See NEW TRIAL.

-

1. Parties who have
acquired the stock of a brewing company and hold the same in trust as the
representatives of the creditors of an insolvent debtor, under an agreement
that if certain payments are not made the stock shall be sold at auction
and the proceeds of the sale shall be divided among the creditors pro rata,
are guilty of a breach of trust where, by an arrangement between them, one
of their number undertakes to resign at a meeting of the creditors, at which,
a majority of the claims being represented by the trustees who have pur-
chased them at about twenty-five cents on the dollar, notice is given that
the stock will be sold at public auction and the proceeds divided in accord-
ance with the agreement under which the trustees were appointed, and
where the trustees shortly afterwards advertise the stock for sale in an
inconspicuous way (care being purposely taken to prevent prospective pur-
chasers from acquiring any information as to its real value), and, at the sale,
the stock is purchased by the trustee who attempted to resign, for the bene-
fit of himself and his co-trustees for ten cents on the dollar, a price much
below its market or true value, and insufficient to pay the claims of the
creditors. JENKINS . HAMMERSCHLAG....

TRUST — Trustees holding stock for creditors — what arrangement by which
they purchase the stock is a violation of the trust.]

2. How such a trustee may resign the trust.] Such a resignation by a
trustee is ineffective to discharge him as trustee or relieve him from the lia-
bility imposed upon him as such. The only manner in which he can legally
resign and cease to be a trustee or terminate his liability as such is by pro-
Id.
curing an order of the court or by the unanimous consent of all the creditors
or other persons interested in the faithful execution of the trust.

3. By whom an action to enforce an accounting may be brought.] In
such a case an action is properly brought against the trustees by one creditor
on behalf of himself and of other creditors similarly situated, for the purpose
of securing a judgment declaring the sale of the stock to be null and void
and requiring the defendants to account Ior their administration of the
estate. Id.

4. Powers which should be given to a receiver.] A receiver appointed
under a judgment in favor of the plaintiff in such an action should not be
permitted to sell the stock until after the defendants have accounted or a
further order of the court has been made authorizing it; nor should the
defendants be removed as trustees or the receiver be directed to make pay-
ments and be discharged from his receivership until after such trustees have
rendered a full account of their acts and doings under the agreement
appointing them. Id

209

TRUST Continued.

5. Plea of laches by dishonest trustees.] It is only in extreme and
exceptional cases that the defense of laches can be used as a shield to protect
unfaithful or dishonest trustees. Id.

6.

Trust fund -- its use in the business of a corporation by its secretary
with knowledge-credits of payments on the earlier items - personal liability
of the secretary.] A secretary of a corporation who, with knowledge that the
corporation is insolvent, and that moneys held by the vice-president and
treasurer of the corporation as trustee are being used in the business thereof,
actively participates in the use of the trust moneys, is chargeable as a trus-
tee de son tort with liability for the loss sustained by the trust fund in con-
sequence of such insolvency, notwithstanding the fact that there was no
intent to defraud the trust estate, and that the secretary acted in the trans-
action as an officer of the corporation.

The fact that, during the period subsequent to the time when the secre-
tary acquired knowledge of such use of the trust moneys, the amount of
trust funds withdrawn from the corporation exceeded the amount of trust
funds deposited with it during such period, does not relieve the secretary
from liability for the balance due the trust estate at the time he acquired
such knowledge where it appears that the trust funds had been used in the
business of a firm, to whose property and business the corporation suc-
ceeded, and that the account of the trust estate with the firm and corpora-
tion constituted a continuous running account, and that the moneys with-
drawn should hence be applied in discharge of the debts prior in point of
time. ANDERSON v. DALEY....

7.

PAGE.

.. 505

When the beneficiaries may sue to enforce such liability.] An action
to enforce the liability of the secretary may be brought by the beneficiaries
of the trust where it is alleged in the complaint that the plaintiffs, together
with certain defendants, are the only parties in interest and that the trustee
refuses to begin an action. Id.

8. Proof that the corpus of the fund was thus used.] Evidence that the
trustee had paid over to the cestuis que trustent the amount of the income of
the estate is sufficient to authorize the court to find that the deficit was
in the corpus of the estate and not in the income. Id.

9. Trust fund-amount to be retained by the trustee from the income of
securities purchased at a premium.] It is the duty of a trustee who has
invested the trust fund in bonds purchased at a premium to make such
deductions from the income, payable to the life beneficiary, as will suffice to
make the principal of the trust fund whole when the bonds mature.

A table of computation may properly be referred to for the purpose of
ascertaining the amount of the deductions to be made or the premium paid may
be divided by the number of interest payments which will be made up to the
maturity of the bonds and the quotient be deducted from each interest pay-
ment and held as principal. Fluctuations in the market value of the bonds
after their purchase have no bearing upon the amount of such deductions.

NEW YORK LIFE INSURANCE Co. v. BAKER.......

10. Estoppel of beneficiary.] Where the life beneficiary has insisted
upon his right to receive the entire annual income of such bonds, he will not
be permitted to assert that the conduct of the trustee in paying the same to
him was illegal; and where the trustee, upon an accounting by him, has been
charged with the amount of the overpayments made to the life beneficiary,
the latter is not entitled to the income arising from the amount thus restored
to the estate, but the trustee may retain such sum during the life of the
beneficiary. Id.

11. When a trustee is chargeable with knowledge of his predecessor's
investments.] What recitals in an order appointing a substituted trustee are
sufficient to charge him with knowledge that the securities in which the prin-
cipal of the estate was invested had been purchased at a premium by his
predecessor, considered. Id.

12. Substituted trustee — what costs are allowable in an action to compel
a transfer of the trust fund.] In an action to compel a former trustee to trans-
fer the trust fund to a substituted trustee, only statutory costs should be
allowed; and an allowance to the attorneys or counsel for the substituted

417

TRUST-Continued.

trustee for legal services rendered for the benefit of the fund must be
obtained in a proceeding directly instituted for that purpose, or by agree-
ment with the substituted trustee. WALTON v. COLLINS..

........

Husband and wife — conveyance of land by the husband to a trustee to
apply the income to the support of the wife during her life and convey the land
to the husband's heirs at law should he predecease her· it creates an irrevocable
power in trust-effect of a reconciliation between the husband and wife-pos-
session of the premises by one holding under a lease from the widow does not avoid
a deed from the trustee to the heirs.

See SMITH v. TERRY...

Will - bequest of specific legacies with remainder to executors in trust·
at expiration of what time the estate will be presumed to have been settled by the
executors- liability of a company for the discharge from registry of bonds held
in trust, upon the application of only one of two trustees — when brokers selling
them are not negligent.

See COOPER v. ILLINOIS CENTRAL R. R. Co....

-

........

Willa devise to an executor to collect and pay over the rents until a sale
creates a trust - —a limit on the price, which may be changed by the beneficiaries,
does not violate the statute against perpetuities—a failure to sell within two
years.

See SPITZER v. SPITZER....

Will-$25,000 of net income payable to a widow is not a demonstratiive
legacy-surplus income cannot be accumulated to meet a future deficiency of
income-such deficiency may be made good from future surplus.

See SPENCER v. SPENCER.
Inheritance tax·

PAGE.

439

394

22

436

403

-

a legacy absolute in terms, impressed by extrinsic proof

with a trust.

See MATTER OF EDSON..

19

Transfer tax on property transferred in contemplation of death — what
transfer is subject to such tax.

See MATTER OF BOSTWICK

223

Will - valid, separable from invalid, limitations — accumulation of
income-intestacy.

99

See DUNCKLEE v. BUTLER..

TRUSTEE- Of a corporation.

See CORPORATION.

VENDOR AND PURCHASER- Action by one of several heirs at law of
deceased grantors to set aside a deed executed by them to their father during
minority — non-joinder of the other heirs at law- — a delay to disaffirm for four-
teen months, and until death, is not a ratification of the deed.

See O'ROURKE v. HALL

Purchaser at a judicial sale—when the title to a lot bounded on a street,
which, by legislative act, is moved ten feet after its conveyance by the original
owner, is not marketable -effect of the owner's having made conveyances of other
lots referring to the street.

See SCRIPTURE v. MORRIS.....

-

Fraudulent conveyance the grantee estopped to enforce against the
premises a mortgage paid by him, which he seeks to re-establish as a lien on the
land.

534

377

See WEISER v. KLING..

266

Marketable title — that a will was erroneously construed in an action to
which all persons interested were parties, is not a ground of objection to the title.
See BROWN v. MOUNT....

440

Restrictive covenants· -a restriction to "a family residence" does not
prevent the erection of an apartment house.

See SONN v. HEILBERG

515

See DEED.

PAGE.

VENUE Change of venue for the convenience of witnesses — personal incon-
venience to the plaintiff will not defeat it.] Where a change of the venue of
an action to the county where the cause of action arose will promote the con-
venience of witnesses, the fact that such change will involve inconvenience
to the plaintiff will not operate to prevent it. HEDGES . BEMIS.... .... 349
City of Yonkers — removal of an action from a Justice's Court to a City
Court-it is a change of forum, not of venue, and is not prohibited by section
18 of article 3 of the Constitution.

WAIVER - Appearance — a stipulation extending the time to answer, signed
by one attorney as defendant's attorney," does not prevent the service of the
answer by another attorney—its effect as a waiver of irregularities and of objec-
tions to jurisdiction.

See PAINE LUMBER Co. v. GALBRAITH

A neglect to deduct commissions from income paid over is a waiver of the

right thereto.

See SPENCER v. SPENCER.

WARRANTY - In deeds.

See DEED.

WATER COMPANY Mandamus

-

-

to compel a water company to furnish
a citizen with pure water at reasonable rates - what allegations are sufficient to
authorize the issue of an alternative writ of mandamus.
See MANDAMUS.

WIFE:

See HUSBAND AND WIFE.

WILL-Valid, separable from invalid, limitations · - accumulation of income
-intestacy.] 1. A testator by the 3d clause of his will gave to his execu-
tor the sum of $25,000, in trust, to pay the income thereof to the testator's
wife during her life, said sum, upon her decease, to become a part of the
residuary estate, and to be disposed of under the 4th article of the will. By
the 4th article the testator gave to his executor all the residue of his estate,
real and personal, in trust, to divide the same into four equal parts, and
apply so much of the income thereof as might be necessary to the support
and education of the testator's four children (three daughters and a son) dur-
ing their minority, but with this proviso, that as soon as each of his daugh-
ters"
shall arrive at the age of twenty-one years, said trustee shall pay over
to such one so arriving at the age of twenty-one years the net income semi-
annually thereafter of one of said equal fourth parts of my said estate during
her life, and upon her death shall pay over the principal thereof to her
issue, if any; but if she shall die leaving no issue living at the time of her
death, then said one-fourth part of my estate shall be added to the portions
of my estate held in trust for the benefit of my other children then living,
an equal amount thereof to each portion. Should any of my said children
die before arriving at the age of twenty-one years, said residue shall be held
in trust as aforesaid for the benefit of the survivors of them and administered
as above provided, only the number of parts into which said residue shall be
divided shall be equal to the number of children then living.

"When my son, John G. Butler, Junior, shall be twenty-one years of
age, said trustee shall pay to him, out of one of the portions of said residue
of my estate, the sum of five thousand dollars, and he shall pay the income
of the remainder of such portion semi-annually to my said son until he
reaches the age of twenty-five years, when he shall pay to my said son the
sum of ten thousand dollars, and he shall pay the income of the remainder
of said portion to my said son semi-annually until he reaches the age of
thirty years, when all the remainder of such portion shall be paid over to

30

68

403

WILL- Continued.

him. Should my said son die before reaching the age of thirty years,
leaving issue, said trustee shall pay over to such issue all of said portion or
part of said trust estate then remaining in his hands; but should my said son
die leaving no issue, then said part of said trust estate, or any unexpended
portion thereof, shall be added to the portions held in trust by said trustee
for the benefit of my other children then living, an equal amount thereof to
each portion."

In an action brought to obtain a construction of the will,

Held, that the provisions of the 4th clause, Should any of my said
children die before arriving at the age of twenty-one years, said residue
shall be held in trust," etc., were intended to apply to the death of a child
occurring during the lifetime of the testator, the words "said residue" refer-
ring to all that portion of his estate remaining after the payment of his debts
and legacies, and not to any particular portion thereof in which any one
of his children had an interest;

That the disposition made by the testator of the shares of his daughters
in case they should die leaving issue was legal, and was separable from
the subsequent provision that, upon the death of a daughter without issue,
one-fourth part of the testator's estate should be added to the portions of
his estate held in trust for the benefit of his other children then living,
an equal amount thereof to each portion; that this latter provision, although
it could be legally complied with upon the death of the daughter first
dying without issue, would, upon the death of another daughter without
issue, result in placing a further and illegal limitation upon that portion of
the share held for the second daughter who had died, which had originally
been set off to the daughter who had first died without issue;

That the same rule applied to the provisions in reference to the share
of the son;

That the will did not provide for an unlawful accumulation of income,
there being no direction as to what should be done with the income that
might accumulate during the minority of the infants, which would, under
the statute, go to the person entitled to the next eventual estate;

That the additions provided for in case of the death of a son or daughter
without issue, were confined to the principal of the various portions, and
had no reference to accumulations of income;

That the direction that, upon the death of the son without issue, the "said
part of said trust estate or any unexpended portion thereof, shall be added
to the portions held in trust" for the testator's other children then living,
referred to that part of the principal which should remain after the pay-
ments of $5,000 and $10,000 to such son, upon his attaining the age of
twenty-one and twenty-five years respectively;

That the bequest of $25,000 to the executor in trust, contained in the 3d
clause of the will, which was, upon the death of the wife, to be disposed of
as part of the residuary estate under the 4th article of the will, was in con-
travention of the statute, and that with respect thereto the testator died
intestate. DUNCKLEE v. Butler..

PAGE.

2. $25,000 of net income payable to a widow is not a demonstrative
legacy-surplus income cannot be accumulated to meet a future deficiency of
income such deficiency may be made good from future surplus-a neglect to
deduct commissions from income paid over is a waiver of the right thereto —
commissions on money spent to improve real property.] The will of a testator
provided: Second, if my beloved wife, Sarah Griswold Spencer, survives
me, I direct and empower my said executors forthwith, upon my deccase, to
set apart a certain portion of my real estate which shall be amply suffi-
cient, in their judgment, to yield at all times a yearly net income of twenty-
five thousand ($25,000) dollars in gold, which said portion I hereby give and
devise to my said executors, in trust, however, to let, lease, manage and
improve and receive the rents, issues and profits thereof, and to pay the net
income thereof up to twenty-five thousand dollars ($25,000) per annum in
gold, or its equivalent, to my said beloved wife during her life in equal quar-
terly payments against her receipt in duplicate, and the balance, if any, of
said net income to the persons, share and share alike, per stirpes and not per
capita, who shall, during her life, be presumptively entitled to take the
portion so held in trust on expiration of said trust, as hereinafter in this sec-

99