
    MATTER OF GILLESPIE.
    
      N. Y. Surrogate's Court;
    
    
      November, 1886.
    1. Apportionment of burdens between life-tenant and, remaindermen; taxes.] Where a testator by his will, after directing payment of his debts and funeral expenses, and making specific legacies of certain chattels, gave the “rest, residue and remainder” of his estate to his wife, for life, with remainder over,—Held, that taxes imposed upon the residuary estate, and the expenses of administration, up to and including the first judicial settlement of the executor’s accounts were chargeable to the corpus of the estate.
    2. Possession of estate by life-tenant; security.] If, in such case, the widow wishes to have possession of the residuary estate, it should be turned over to her upon her giving security to protect thé remaindermen; otherwise it should be retained by the executor.
    Petition of William I. Clark, for the judicial settlement of liis accounts as executor of the last will and testament of George B. H. Gillespie, deceased.
    The said testator’s will, after providing for the payments of all just debts, funeral expenses, and a few specific legacies, continued as follows :
    “ Fourth—All the rest, residue and remainder of my estate, real and personal, and of every kind and description whatsoever, as well what I now own as what I may own at the time of my death, I give, devise and bequeath to my beloved wife, Mary Ann Gillespie, to have and to hold for and during the full tdrm of her natural life.
    “ Fifth—Upon the death of my said wife, I give and bequeath the following legacies to the following persons, namely : (Here follow six specific bequests of personal chattels).
    “ Sixth—Upon the death of my said wife, I direct my executors hereinafter named to divide all my residuary estate given to my wife for life by the fourth clause of,this my will (except what I have specifically bequeathed in the fifth clause of this my will) into two equal moieties and I deA’ise and bequeath the same, as folloAvs :-”
    
      He appointed his wife executrix, and William I. Clark executor of the will. Mrs. Gillespie never qualified as executrix, and left the administration of the estate to Mr-Clark, who alone qualified as executor.
    During the administration taxes were imposed upon the personal property aggregating in a considerable amount, and were paid by the executor from the income of the-estate, against the protest of the widow, who claimed that up to the time of the first judicial settlement of the executor’s account, she was entitled to the gross income of the estate, undiminished by the payment of taxes, and thq,t the taxes, commissions, allowances and expenses of administration should be paid out of the corpus of the estate.
    The executor now submits this question to the Surrogate in a proceeding for a voluntary judicial settlement of his account. The question of the right of the widow to-the possession of the estate was also submitted for decision-
    
      Lewis L.. Delafield (Delafield & Haviland, attorneys), for the executor.
    The taxes and all of the expenses of administration should be paid from the corpus of the estate, for until they are so paid, and an accounting had, the “ rest, residue and remainder ” of the estate bequeathed to Mrs. Gillespie for .life cannot be determined. Reynolds v. Reynolds, 3 Dem., 82.
    Matter of Housman (4 Dem., 404), is clearly distinguishable from the case at bar, for in that case a former accounting had been had fixing the “ rest, residue and remainder ” of the estate, which under the terms of the will was to be separated into seven distinct funds to be held by the executors in trust, etc., and the proceeding in which this most interesting opinion was rendered was an accounting, not by the executor, as such, but by the executor as trustee.
    
    The life-tenant in the case at bar is to have & particular sum, not d°terminable by testator, but to be dependent upon the expenses of administration, and to be definitely fixed by the Surrogate.
    “It is only after a fund has been'set apart that the income is subjected to diminution by the payment of taxes.” Gilbert, J., in Wells v. Knight, 5 Hun, 50.
    In this case it is the duty of the executor to make an accounting at the earliest practicable moment, and it is only after the life-tenant’s interest shall have been determined and set apart 'by such accounting that the taxes and expenses connected therewith will become payable from the income.
    Where an expense is incurred by any trustee for the safety or preservation of the estate, the life-tenant fully and fairly bears his share of the burden by losing annually the amount of interest on the principal paid for such safety or preservation. The only interest which the life-tenant has in the safety or preservation of the principal is that he may receive the interest accruing thereon during his life. The only interest which the remainderman has in the safety and preservation of the principal is that he may receive the principal itself. That the remainderman may surely receive his principal a certain sum is paid for its safety and preservation, and it is a just and equitable apportionment of such expense that the life-tenant should pay interest for the safety of interest, the remainderman principal for the safety of principal. This principle has been repeatedly recognized by the courts in this State in the analogous case where large premiums have been paid by the life-tenant (or trustee) for the additional security afforded by investments in U. S. bonds.
    See Whittemore v. Beekman, 2 Dem., 275 ; Matter of Pollock, 3 Redf., 100,116; Bergen v. Valentine, 63 How. Pr., 221.
    A dictum adverse to this doctrine contained in the opinion in Farwell v. Tweddle (10 Abb. N. C., 94) is disregarded in Bergen v. Valentine (supra).
    
    The decision of the Supreme Jud. Ct. of Mass, in the recent case of New England Trust Co. v. Eaton (25 Am. 
      
      Law Reg., 162), in which it is held that the trustee for a life-tenant, having purchased bonds at a premium, is bound to retain from the interest thereon such a sum as will in-demnify the remainderman for the loss of such premium, is not at variance with the principles enunciated in Whittemore v. Beekman and the other New York cases, for in the Massachusetts case Judge Devens predicates his opinion upon the violent assumption that the premium paid for the bonds in question was due to the rate of interest and not to the additional security afforded thereby.
    
      John M. Knox, Jr., for the life-tenant.
    
      Wm. Kent, for the remaindermen.
    I. The will sets apart no fund out of which taxes, commissions and expenses of the trust are to be paid. Such •expenses which are continuing from year to year are to be paid out of the income of the life-tenant. Reynolds v. Reynolds, 3 Dem., 82; Cammann v. Cammann, 2 Dem., 211 ■(charging trustee’s commissions on income); Stubbs v. Stubbs, 4 Redf., 170 ; Pinckney v. Pinckney, 1 Bradf., 269, 273 ; Booth v. Ammerman, 4 Bradf., 129 ; Lansing v. Lansing, 45 Barb., 182. The yearly taxes and executor’s commissions are not expenses of administration, but are expenses connected with the trust and must' be deducted from the income of the life-tenant.
    II. The life-tenant may take into her custody the fund or share to the use of which she is entitled for life, on giving security for its preservation for the remaindermen. Tyson v. Blake, 22 N. Y., 558; Smith v. Van Ostrand, 64 N. Y., 278; Livingston v. Murray, 68 N. Y., 485; De Rivas v. De Herques, 12 Weekly Dig., 87 ; Monfort v. Monfort, 11 Weekly Dig., 543; Matter of Woods, 35 Hun, 60.
   Rollins, Surr.

First—The taxes and expenses of

■administration up to and including this accounting are chargeable to the corpus of the estate.

Second—If the testator’s widow wishes to have possession of the residuary estate, it should be turned over to her upon her giving security to protect the remaindermen (Tyson v. Blake, 22 N. Y., 558 ; Matter of Fernbacher, 17 Abb. N. C., 339; Livingston v. Murray, 68 N. Y., 485) otherwise possession should be retained by the executor. In the latter event he will hold it in accordance with the doctrine of Spear v. Tinkham, 2 Barb. Ch., 211; Clark v. Clark, 8 Paige, 152; Covenhoven v. Shuler, 2 Paige, 122, 132.  