
    In the Matter of the Judicial Settlement of the Account of Margaret N. Harteau and Others, as Executors of and Trustees under the Last Will and Testament of Henry Harteau, Deceased. Margaret M. Harteau and Others, as Trustees, etc., of Henry Harteau, Deceased, and Others, Appellants, Respondents; Harriette A. H Berry, Contestant, Respondent, Appellant.
    Second Department,
    April 24, 1908.
    Will — trust — surplus income goes to next eventual estate — gift to former city of Brooklyn — city of Mew York as successor — validity of remainders not dependent on bequest — accumulation of income — commissions of trustees.
    Where a will makes a valid limitation of an expectant estate and a valid suspension of absolute ownership of personal property by placing the proceeds of a sale of lands together with the personal property into a trust fund to pay annuities to the plaintiff’s widow and others during her life, with remainders over to charitable institutions, stock purchased by the trustees with dividends accruing on stock already held by them goes to the remaindermen as owners of the next eventual estate if it exceed the amount of the annuities directed to he paid so as to constitute an unlawful accumulation.
    This is true although the entire estate does not go to the remaindermen on the expiration of the trust because cf deductions by payment of annuities, etc., for it is not necessary that an eventual estate be of the entire preceding trust estate in order that the rule apply that the next eventual estate takes income which cannot be lawfully accumulated.
    The city of New York as successor of the corporate rights, capacities and trusts of the former city of Brooklyn may take a gift made to said city for the erection of a statue. The gift does not foil on the theory that the beuefleiary is not ascertainable.
    Even if the gift of a portion of the remainder for the erection of a statue were inval'd, the other valid remainders are not affected.
    A provision thav the testator’s wife should not be required to pay interest, on a mortgage on her property owned by him so long as she should live and that the mortgage should be canceled if she left, her property to charitable institutions, but if not, the mortgage and arrears of interest should be collected, is not void as an unlawful accumulation of income.
    Where trust duties are imposed on executors in addition to those of administration, they are entitled to trustees’ commissions.
    Cross-appeals by Margaret ¡N". Harteau and others, as trustees, etc., of Henry Harteau, deceased, and others, and by Harriette A. H. Berry, the contestant, from various parts of a decree of the Surrogate’s Court of the county of Kings, entered in said Surrogate’s Court on the 22d day of July, 1907, settling the accounts of the executors and trustees of Henry Harteau, deceased.
    
      George V. Brower, for the trustees, appellants.
    
      William G. Cooke [Howard O. Wood with him on the brief], for the appellants Brooklyn Children’s Aid Society and Gates Avenue Homeopathic Dispensary.
    
      William N. Dykman, for the appellant The Brooklyn Society for the Prevention of Cruelty to Children.
    
      James B. Bell, for the appellant the City of New York.
    
      John R. Kuhn, for the respondent appellant Harriette A. H. Berry.
   Gaynor, J.:

The will of the testator left all of his personal estate, excepting some specific bequests, to his executors, and contained an imperative power to them to sell his real estate at the death of his widow, or sooner upon her consent, and put the proceeds,into a common fund with the personalty, and also a direction to put all income into such fund,' and provided that they should dispose of the said fund as follows:

1. Fay to the Avidow for her life $1,200 a year, and also the taxes and repairs on her oavii residence, and also on the country residence of the deceased left to her for life by the will.
2. Fay to his sister $600 a year for the life of the widow, and if she survive the AvidoAV, then a present lump sum which shall be the equivalent of $600 a year for the rest of her life.
3. Pay to his niece $400 a year for her life, and its equivalent in gross in the same way on the death of the AvidoAV.
4. On the death of the widoAv to devote $35,000 to the erection of a statue of General the Marquis De La Fayette in Prospect Park in the City of Brooklyn.
5. To divide the remainder among five charitable institutions which are named, share and share alike.

The will was made in 1895 and the testator died in the same year. The said sister is now dead. The widow and niece are alive, and the latter is the sole heir and next of kin of the testator.

a. The testator left 160 shares of the par value of $100 each in an insurance company whose capital stock was $100,000. At his death the company had a surplus of earnings of $190,000,- which continued to increase until it was more than $250,000 in 1902. The company then increased its capital stock to $200,000. It gave its stockholders the option to purchase the said new shares at par, viz., $100 a share, each the same number of shares as he already held, before offering them to outsiders. For the express purpose of enabling its stockholders to take the same, it declared a dividend of 100 per cent, on its old stock out of such surplus. The executors used such dividend, viz., $16,000, to pay for their allotment of the new stock, viz., 160 shares. Whether this new stock is to be treated as income or as principal of the estate was much discussed below and here, for if it be the former, then there is an excess of income over and above the annual payments directed by the will, and as an accumulation of it would be unlaivfnl under the statute, the question is presented as to who is entitled to it. The learned surrogate held that it was income and directed it to be distributed to the widow and the niece, on the ground that there is an intestacy in respect of it. But that result does not follow. It goes to those entitled under the will to the next eventual estate, i. <?., the estate after that of the executors as trustees. Section 40 of the article of the Revised Statutes on the creation and division of estates (1 R. S. p. 726) is as follows : When, in consequence of a valid limitation of an expectant estate, there shall be a suspense of the power of alienation, or of the ownership, during the continuance of which the rents and profits shall be undisposed of, and no valid direction for their accumulation is given, such rents and profits shall belong to the persons presumptively entitled to the next eventual estate.” And by another provision (1 R. S. p.- 773, sec. 2; now sec. 2, Pers. Prop. Law) this rule is made applicable to future estates in personal property (Kilpatrick v. Johnson, 15 N. Y. 322; Gilman v. Reddington, 24 id. 9; Cook v. Lowry, 95 id. 103 ; Reeves v. Snook, 86 App. Div. 303). There is here a valid limitation of an expectant estate and a suspense of the absolute ownership.

“ An estate in expectancy is where the right to the possession is postponed to a future period ” (1 B. S. p. 723, sec. 8), which is the case in respect of the remainder or residue under this will, by the said analogy in the case of estates in personal property to that of estates in real property (Lalor on Real Prop., p. 64, et seq. Hawley v. Ross, 7 Paige, p. 107). The next eventual estate under this will goes to the said charitable institutions upon the death of the widow; and hence such surplus income goes to them presently as it cannot be lawfully accumulated. That all of the estate held in trust does not go in bulk to the charitable institutions, but less deductions made from it by the payment of the said annuities and the sum for the gift of the statue, does not impair the fact that the next eventual estate goes to them. It is not necessary that such eventual estate be of the entire preceding estate in trust in order that the rule of the next eventual estate taking the income which cannot be lawfully accumulated apply. It often happens that the next eventual estate is diminished by payments directed by the will to be made out of the preceding estate. In the foregoing view it makes no difference whether such new shares of stock belong to principal or to income, for the same result follows in either case. But if that were not the case it would be unjust and might be difficult to classify it as income, inasmuch as the effect would be to reduce the principal of the said original 160 shares about one-half in value, for that was the necessary effect of doubling the shares of the company. The testator never meant that his estate should be dealt with in such a way as that. The scheme of the issuing of the new shares might well be found to have been to turn §100,000 of the surplus into capital.

5. The learned surrogate decided the provision for the statue to La Fayette to be void on .the ground, apparently, that there was or is no beneficiary ascertainable from the will to enforce the trust of the executors in that respect. The beneficiary was "the city of Brooklyn, and while it has ceased since 1897 (two y@ars after the death of the-testator) to be a separate city, it is a borough of the new city of Hew York, which came into existence January 1st, 1898, and succeeded to its corporate rights, capacities and trusts. The city of Brooklyn had the capacity, like cities generally, to receive the gift (Dillon on Munic. Cor. [4th ed.] sec. 566, et seq.), and no reason is given why such capacity did not devolve to its successor.

g. The learned surrogate also held that the provision in respect of the charitable institutions depended on the validity of the provision for the statue, and the latter failing it failed. Ho reason was given below or here for this. The most that could be said would be that the amount devoted by the will for the statue should not go into the balance or residue given to the charitable institutions, but to the widow and next of kin, the provision for the statue failing ; but even that might not be held to be the case here, after giving full consideration to the. whole purpose of the testator as exposed by the will (Carter v. Board of Education, 144 N. Y. 621; Langley v. Westchester Trust Co., 180 id. 326).

d. The testator held a mortgage on his wife’s house, and directed in his will that she should not be required' to pay any interest thereon so long as she should live, and that if she left her property by will to charitable institutions in the city of Brooklyn, his executors should cancel such mortgage with all arrears of interest to such institutions, but that if she did not do so the said mortgage and arrears of interest should be collected. The learned surrogate properly held that this was not an accumulation of income and therefore void.

e. There being a trust imposed on the executors in addition to that of administration, they are entitled to trustees’ commissions.

Inasmuch as such radical changes will have to be made in the decree,'it should be reversed instead of being modified, with costs to the executors and to the-said charitable institutions, payable out of the estate.

Jerks, Hooker, Rich and Miller, JJ., concurred.

Decree of the Surrogate’s Court of Kings county reversed, with costs to the executors and to the charitable institutions, payable out of the estate.  