
    In the Matter of the Accounting of Edward C. Schaefer et al., as Executors and Trustees under the Will of Frederick Schaefer, Deceased, Appellants. Albert Schaefer, Respondent.
    
      Matter of Schaefer. 178 App. Div. 117, affirmed.
    (Argued November 13, 1917;
    decided November 27, 1917.)
    Appeal, by permission, from an order of the Appellate Division of the Supreme Court in the first judicial department, entered June 15, 1917, which modified and affirmed as modified a decree of the New York County Surrogate’s Court settling the accounts of the' executors and trustees under the will of Frederick Schaefer, deceased. Decedent died in 1897. A portion of the estate consisting of stock of the par value of $100, but carried by the trustees at a value of $200 per share, was in 1901 set off for the benefit of respondent, under a trust provided for in the will. The stock continued in the possession of the trustees until sold in 1912 at $415 a share, an increase of $215 a share. The fife tenant contended that of this increase at least a portion represents accumulated surplus profits and that these had been available for distribution to the stockholders as dividends and should equitably pass to the beneficiary of the trust as income, instead of being accumulated and added to the principal of the estate. The Surrogate’s Court held that the proceeds of the sale could not be apportioned but that all of it must be treated as principal. The Appellate Division reversed the Surrogate’s Court and held that so much of the price of the stock as represented accumulated earnings ' during the period of the trust should be paid to the fife tenant as income. The following question was certified: “ Is the fife beneficiary, Albert Schaefer, entitled to receive, as part of the income of the trust fund, so much of the sum received by the trustees, upon the sale of the stock held • in trust for him, as represented a proportionate part of the increase in value of the assets of the corporation arising from the application by said corporation of a portion of its net profits to the increase and appreciation of its said assets? ”
    
      Ashbel P. Fitch for appellants.
    
      Conrad Saxe Keyes and Axel Josephsson for respondent.
   Order affirmed, with costs to respondent payable out of the corpus of the trust fund, and question certified answered in the affirmative, on opinion of Scott, J., in the Appellate Division.

Concur: Hiscock, Ch. J., Chase, Cuddeback, Cardozo, McLaughlin, Crane and Andrews, JJ.  