
    In the Matter of the Petition of George Doheny and John G. Lynch, as Trustees under the Will of Patrick Lynch, Deceased, for Leave to Resign. Mary L. Pendergast and Others, Appellants; George Doheny and John G. Lynch, as Trustees, etc., of Patrick Lynch, Deceased, Respondents.
    
      Trust — taxes on real property, assessed during a testator’s life, should be paid from his general estate and not from, a trust fund of which the real property is part-accounting, when it does not create an estoppel.
    
    Taxes levied prior to the death of a testator, upon real property in which a trust is created by the testator’s will, are not a charge- against the trust estate, but are payable out of the testator’s general estate.
    Where it appears that the trastees were also the executors under the will, and that pending the probate thereof they were appointed temporary administrators -of the estate, and while, acting as such paid taxes assessed upon the trust property ■ prior to the testator’s death, a decree rendered upon their final accounting as temporary administrators, which simply determined that the temporary administrators had received from all sources a- certain sum and had expended for all purposes a certain other sum, leaving a balance of §558 in their hands which, less their commissions and costs, they were directed to pay over to themselves as executors, and which did not attempt to. make any distinction between the receipts and expenditures received and made on account of the trust estate from those received and made on account of the general estate, will not estop the cesiuis que trustent, when, upon the accounting of the trustees, the latter seek to charge the payment of such taxes upon the trust estate, from insisting that such taxes should be paid out of the general estate.
    Appeal by Mary L. Pendergast and others from so much of an order of the Supreme Court, made at the Onondaga Special Term and entered in the office of the clerk of the county of Onondaga on the 9th day of November, 1901, as overrules and disallows the objections filed, on their behalf to so much of the account of the trustees as credits themselves with the sums of $359.68 and $85.02.
    The proceeding was instituted on the 29th day of May, 1901,. by the respondents, trustees, by service of their petition duly verified on that day, in which they asked for a settlement of their account, for allowance of their commissions and for permission to resign as such trustees.
    
      William S. Jenney, for the appellants.
    
      Leroy B. Williams, for the respondents.
   McLennan, J.:

Patrick Lynch, of the city of Syracuse, N. Y., died on the 15th day of September, 1898, leaving a last will and testament, in which the respondents George Doheny and John G. Lynch were named executors, and which, among others, contained the following provision:

“ 2nd. I give, devise and bequeath to my executors hereinafter named, the store and premises known as No. 128 E. Genesee St., in Syracuse, being about twenty feet on said street, and now leased in part to Bartel’s Brewing Co., in trust nevertheless for the following uses and purposes, to wit: to rent or let to the best advantage, and from the income thereof to pay all taxes, assessments and repairs', and pay the remainder of the net income and rents thereof to my daughter Mary L. Pendergast quarterly during the term of her natural life, and upon her death they shall convey and deliver said real estate to the children of my said daughter then living.”

Upon the will being offered for probate, objections were made, and on the 5th day of October, 1898, the respondents were appointed temporary- administrators of the- estate, to-'act-pending- the hearing of such objections, and were authorized to take possession “ of the real and personal property of which said Patrick Lynch died seized and possessed, and receive the income, rents and profits thereof as the same become due and payable, until the further order of the court; and they are also hereby authorized -to lease the real estate of which said deceased died seized for not more than one year, and to pay from the income thereof all taxes and assessments thereon, and to keep, the same in repair and to pay therefor from the income thereof. Also to pay the debts and expenses tending the last sickness and funeral of said deceased.”

The respondents, as such temporary administrators, immediately entered upon the discharge of their duties, took possession of all the real and personal property of which the deceased died seized, collected the rents and income thereof, received from all sources the sum of $13,405.59. From the moneys in their hands they paid the debts and expenses attending the last'sickness and the funeral of the deceased and other debts of the estate, amounting in the aggregate to the sum of $12,847.59, leaving a balance in their hands of $558.

The will of Patrick Lynch was duly probated on the 2d day óf ’ February, 1899, aiid thereby the respondents became executors and trustees under such will. Thereupon' and on the 8th day of February, 1899, they presented their petition as temporary ¡administrators - to the surrogate, of Onondaga county, asking for a settlement of their accounts and their discharge, and made a detailed statement of their receipts and expenditures a part of such petition. By stich statement of account it appeared that on the 3d day of January,, 1899, the temporary administrators paid to E. F. Allen, Treas.,. State & County Taxes 1898, Estate of P. Lynch; $1,504.25.” Also under date of February 4, 1899, was the following item:. “E. F. Alien, Treas., City Taxes 1898, 130 E. Genesee St., (the trust property), $359.68.” It appears by the affidavits used upon this proceeding, although not indicated by the account, that of the first item of $1,504.25, $85.02 was for taxes on the trust property, and the account itself indicates that was true of the whole of the' second item.

Notice of the presentation of such petition, of which the statement of account constituted a part, was given to all parties interested, and there being no objection a decree was duly made by the Surrogate’s Court adjudging, in substance, that the account presented was correct; that there was a balance in the hands of the temporary administrators of $558. Their commissions were fixed at $324.06, and their costs at $70, leaving a balance of $163.94 which they were directed to pay to themselves as “ executors ” of the will of Patrick Lynch, deceased. Upon such payment being made it was adjudged that the temporary administrators should be discharged and their accounts as such finally settled. Thereupon the respondents entered upon the discharge of their duties as executors and trustees under the will of Patrick Lynch, deceased, and continued, to act as such until the order appealed from was made which permitted them to resign as trustees, and settled their accounts. The controversy arises over the order so far as it settles such account, in that the cestui que trust was not credited with the two items, above referred to paid by the temporary administrators for taxes upon the trust property.

The facts are not in controversy. The temporary administrators, in making up their account as such, did not make any distinction between moneys received from the estate generally and those received from the trust property, and the same was true with reference to their expenditures. Such bookkeeping was entirely proper, or at least it was immaterial so far as the appellants were concerned, because at that time, a contest existing as to the validity of the will, no one could know whether or not there would be a trust estate. If the contest had been successful the deceased would have died intestate, and there would have been no trust estate or cestuis que trust. Even under such circumstances it undoubtedly was the duty of the temporary administrators to have kept the income from and disbursements made in connection with the real property separate and distinct from the receipts and expenditures affecting the estate generally, to the end that the real estate, with the net accumulations, might be turned over to the heirs in case there was sufficient personal property to pay the indebtedness against the estate; but the appellants had no interest or concern in what the temporary administrators did in that regard, because, so far as then appeared, they had no interest in the ■ estate and would not have unless the will should he declared valid. The appellants, even had they known that the temporary administrators were paying the debts of the general estate with the net' income received from the East Genesee street property, could not have been heard to complain, because .at that time, so far as was known, it was not trust property, and the appellants had no interest to protect in that regard. Their interest commenced when it was established that the deceased had made a valid will which created a trust for their benefit. The will, however, having been admitted to probate, and a trust estate having been thereby created, it becárne necessary to determine the rights of the parties ás. of the time of - the testator’s death, and then and only then it became important to determine the rights of the eestuis que trust in the real estate in question, and the simple question is presented whether the method of- bookkeeping adopted by the temporary administrators, which we may assume was approved by the decree of the Surrogate’s Court discharging the respondents as such, can in any manner affect the rights of the eestuis que trust.

It appears that the two items paid for taxes above referred to, were paid by the temporary administrators out of funds received from the rents and income of the trust estate. The taxes for the year 1898 upon the real property constituting the trust estate, having been assessed prior to the. death of Patrick Lynch, were not a charge against such trust estate,, but were payable out of the general estate the same as any other indebtedness of the testator. (Matter of Babcock, 115 N. Y. 450.)

It is, therefore, only necessary to inquire whether the decree made by the Surrogate’s Court discharging the temporary administrators, and Which directed them to turn over .all the property of the estate to the executors under the will which then had been admitted to probate, was. of such a character as to estop the appellants from claiming credit for the amount which the temporary administrators had paid for the benefit of the general estate, out of the funds belonging to the. eestuis que trust.

The decree of the Surrogate’s Court discharging the temporary administrators in no manner purports to settle the estate as between the several interested parties. It is not a decree of distribution. It in no manner assumes to determine .what part or portion was included in the trust or remained a part of the general estate. ' It in no manner purported to strike a balance between the receipts and expenditures affecting the trust property. It did not assume to direct that any sum should be paid over to the trustees by the temporary . administrators. The decree simply determined that the temporary administrators had received from all sources out of the estate a certain sum; had expended for all purposes in connection therewith a certain other sum, leaving- a balance of $558 in their hands which, less their commissions and costs, they were directed to pay over, not to themselves as trustees, but to themselves as executors under the will of Patrick Lynch, deceased. Undoubtedly, the decree having been made upon notice to all the parties interested, if it had determined that the balance of $558, less the commissions and costs, belonged to the trustees, and had directed that that amount be paid •to them as such, the trustees and those claiming under them would have been bound by such determination, and if mistake had occurred it could only be corrected by a review of such decree. But no such determination was made, and such balance was not directed to be paid to the respondents as trustees, but to them as executors, and such balance and the entire estate was turned over to them as such executors. It, therefore, became their duty to adjust the accounts of the estate between themselves as executors and themselves as trustees. Certainly the cestuds qm trust were in no position to compel such adjustment until the respondents as trustees presented their account as such, because then, so far as appears, for the first time the cestuis que trust knew that it was proposed to use money which belonged to them with which to pay the general indebtedness of the estate. There was nothing in the decree of the surrogate which authorized the respondents to credit the balance which remained in their hands as temporary administrators to themselves as trustees, rather than to themselves as executors. Under the decree as executors they became possessed not only of the balance remaining in their hands as temporary administrators, but of the entire estate, and it then became their duty to make proper distribution as between the appellants and the others interested in the estate. There was nothing in the decree which discharged them as temporary administrators to prevent them from so doing, and we think there is nothing in such decree to prevent the appellants from compelling such action. The decree made by the Surrogate’s Court on the final settlement of the temporary administrators’ account determined nothing beyond the amounts received and paid out by them.' (Johnson v. Richards, 3 Hun, 454.)

The relief sought by the appellants is equitable. By granting it '. no injustice can result to any interested party. The respondents presumably have the funds in their possession as executors with which to credit the estate, which was in their hands as trustees, with the amount which had been improperly taken from the trust funds and used for the purposes-of the general estate. ■

The .conclusion is reached that the order appealed from should be modified, so as to provide that the account of the respondents as trustees.be corrected by disallowing, the items of three hundred and . fifty-nine dollars and sixty-eight cents and eighty-five dollars and •- two cents, and directing that such' sums be paid to the appellants,,. and. as so modified the order is affirmed, with ten dollars costs and '= disbursements to the appellants, payable out of the money of the' estate other than trust property; ■

Spring, Williams and DAvxy.Jj., concurred ; Hiscock, J., not voting.

Order modified so as to provide that the account of the respondents, as trustees, be corrected by disallowing the items of three • hundred and fifty-nine dollars- and sixty-eight • cents and eighty-five . dollars and.two cents, and directing that such sums be. paid to .the appellants,, and as so modified affirmed, with ten dollars costs and " disbursements, payable out of. the moneys of- the estate other than trust property. „  