
    Benjamin Parsons and Mary his Wife, and John Gray, a Minor, by his Guardian, versus John Winslow.
    a bequest was of a sum of money to one, in trust to invest it in real estate or public stocks, or both, and to pay the income to the widow of the testator, and after her death to pay the principal over to the testator’s son. The trustee, having lost the greater part of the fund, and being unable to replace it, was removed, and ordered to convey his remaining estates to a new trustee appointed by the Court. The same falling short of the sum originally bequeathed, the new trustee was ordered to pay to the widow, for arrears of her annuity then due, the amount of interest cast on the net proceeds of the estates received. of the former trustee ; and such interest being so deducted, the remainder was to form the future capital, of which the interest was to be paid ; the widow, as the whole she was entitled to receive.
    The expense of putting into tenantabie repair an estate purchased by such ’ trustee, is a charge on the principal fund ; that of keeping it in repair,'is to be deducted from the income.
    . ohí Gray, late of Boston, deceased, by his last will, made on the 19th oí April, 1805, bequeathed to the said John Winslow, 30,000 dollars, in trust for the sole use of his wife Mary, now the wife of the said Benjamin; and directed the trustee to invest the same in real estate or public stocks, or both, as to the trustee should seem most fit, convenient, and secure, and promise the greatest benefit and advantage to the said Mary, for whose use the trust was created; and' to pay to her all the income thereof, during her widowhood and life , and the principal sum to his son John Gray, jun., one of the now plaintiffs, at her decease.
    
      The present action is a suit in equity. The plaintiffs, in their bill, which was filed at the last March term,, in this county, after setting forth the bequest, the probate of the will, the acceptance of the trust by the defendant, and his receipt of the fund, allege that he has neglected to invest * the same in pub- [ * 362 ] lie stocks, or real estate, as directed, and has mixed and involved it with his own estate, in trade and commerce for his own private advantage ; whereby the plaintiffs apprehend that he has lost and wasted the fund. Wherefore they pray that he' may bo compelled to answer to the said charges, to invest the said fund according to the directions of the testator, and to give bond with sureties for the faithful execution of the trust in future, or that he be removed, &c.
    The defendant, in his answer, acknowledges the receipt of the principal sum, and alleges that, with a view to máke it most productive, he commenced business and negotiations therewith, and made investments thereof, in connection with Messrs. Barker Bridge, merchants then in good credit in Boston; he believing that this was the most fit and secure way of investing the fund, and promised the greatest income; that he had accordingly realized and paid over to the said Mary an interest of seven and eight per cent for several of the first years ; that the plaintiffs well knew the manner in which he had invested and was investing the fund, and did not, until the year 1818, request him to invest the same in real estate or public stocks ; and that he invested in the same manner several thousand dollars of his own money. He then states that the said Barker &f Bridge failed and became insolvent on the 25th of December, 1810, having in their hands the sum of 26,600 dollars, 75 cents, of the said principal sum of 30,000 dollars; of which he was able to recover only the sum of 618 dollars; and he offers to assign the balance of the judgment recovered against them, foi the use of the plaintiffs, as the Court shall order, in execution of the trust. Finally, he avers that, notwithstanding, the said loss, he has every year paid to the said Benjamin and Mary the amount of six per cent, upon the said 30,000 dollars, and that, at the commencement of this suit, there was not due to them a year’s income upon the said sum. Wherefore he prays to be discharged from any further * accountability respecting the trust, [ * 363 ] and that .the plaintiffs’ bill may be dismissed. •
    It was ordered by the Court, by the consent of the parties, that it be referred to William C. Aylwin, Esq., to take and state an account between the parties complainants and the defendant concerning the said trust; to inquire and state in his report, what estate the de'endant was possessed of, and ascertain the value thereof.
    
      Mr. Aylwin made his report at the July term, in Plymouth, which contained a schedule of sundry parcels of real estate, the property of the defendant, which, by an appraisement afterwards taade, were valued at 26,120 dollars. The report also stated that the defendant had not paid to the said Benjamin and Mary any part of the interest or income which had accrued from the said principal fund, from and after the 26th of August, 1818.
    Afterwards, at the October term, in Norfolk, by agreement of the parties, it was ordered that the defendant should resign the trust, and that he should convey the said real estate, by good and sufficient deed or deeds to be approved by the Court, to the trustee who should be appointed by the Court, in satisfaction of the sum due from the defendant, and that the trustee so appointed should accept such conveyance in payment of the sum due, so far as the same should go towards the said payment.
    At the November term, in Middlesex, William P. Green, Esq., was substituted in the place of the defendant, who was directed to pay him the principal sum, and the interest thereof, from the said 26th of August, amounting together to the sum of 32,155 dollars and costs; the said estates to be received, at the said appraised value, in part thereof; and for the balance the new trustee was to have an execution against the defendant. And, as it was uncertain whether said money would be received, and until it was ascertained whether any part, and how much thereof was received, it could not be determined what part thereof, or of the said real estate [ * 364 ] or its proceeds, should be paid * over to the said Benjamin and Mary, as income or interest, and what part the trustee should retain as principal; the trustee was ordered, as soon as might be, after the receipt of the money or any part of it by him, and the conveyance of the said estates by the defendant to him, to make report to the Court, of the money or other effects and estate, which might have come to his hands and possession, of the then present situation thereof, and the income that might be derived from it; and all further proceedings were stayed, until such report should be made.
    At the last November term, in this county, Mr. Greene reported .hat he had received from the defendant the conveyances ordered )y the Court, with other property of the value of 800 dollars; gave a detailed account of the nature and condition of the several parcels of estate so conveyed, stated that, the said Benjamin had demanded of him payment of the whole of the interest or income in arrear, out of the funds so conveyed; and being unadvised whether the said Benjamin was entitled to receive any sum from the fund, and if any, whether he was entitled to receive the whole amount of interest in arrear, or what proportion thereof, prayed the advice and direction of the Court in relation thereto; and should they be of opinion that he was entitled to receive any sum from the fund, in what manner the same should be paid, whether by a sale of part of the estate, or whether a portion thereof should be set off to him and his wife at thé appraised value. He also stated that the counsel for the complainants in this action had requested payment of their fees, and of the bill of costs in the suit, from the estate received by the trustee; and he prayed direction, whether he was to pay the same, and if so, in what manner it should be provided for.
    He also stated that several parts of the estate conveyed to him needed immediate repairs, before they could be made productive : and he prayed advice whether the expense of such repairs should be deducted from the income of the whole trust property, or in what manner the same should * be provided for ; [ * 365 ] and whether the expenses generally were not to be deducted from the rents.
    By a supplementary report made afterwards at the same term, the trustee suggested that the defendant had deceased, and that his widow had a right to dower, in all the estates so conveyed by her late husband.
    And now, at this term, the opinion of the Court was pronounced by
    
      
       See 6 Mass. Rep. 169, Parsons & Ux. vs. Winslow, which was an action ans-ng under this bequest.
    
   Jackson, J.

The question reserved on making the last decree in this case was, what proportion the tenant for life, and the reversioner, were respectively entitled to, of the estate and effects, which should be received by force of that decree. The sum due from the former trustee, with interest, was 32,155 dollars; and he was ordered to pay that sum with the costs of the suit. If the whole of this money had been received by the trustee, who was then appointed, there would have been no further question in the case. The costs would have been paid to the plaintiffs; the interest to the annuitant; and the principal sum of 30,000 dollars would have been retained by the trustee, to be disposed of according to the provisions of the will, under which it is held.

But it was apprehended at that time, that the former trustee would be unable to pay the whole that was due ; and it appears from the report of the new trustee, that the whole amount received by him is 26,920 dollars; the greater part of which has been received in the real estate mentioned in the former decree, according to the appraisement thereof therein mentioned. It appears, therefore, that a considerable loss was sustained, whilst the fund was in the hands of the former trustee; and we have now to apportion that loss upon the respective parties, who were interested in the fund.

This loss will be apportioned in the same manner, as if it had arisen from the fall in the price or value of any public stocks, or of any land, in which the fund should have been invested [ * 366 ] according to the provisions of the will. * It would be unjust, and contrary to the manifest intent of the testator, if the tenant for life, on the one hand, should continue to receive the whole amount of the interest on the original fund, after the principal had been thus reduced; or if, on the other hand, the income should be applied to replace the principal. In the one case, the tenant for life would be left, for an indefinite period, without any support or benefit from the intended bounty of the testator and in the other, the reversioner might lose the whole that was in tended for him.

The former trustee had paid all that was due to the tenant fov life, up to the 26th of August, in the year 1818. This suit was soon afterwards commenced, and the result of it has proved that a great loss had then occurred. If the whole capital, then remaining, could have been taken at once by a new trustee, the tenant for life would have been entitled to whatever income this reduced capital should produce from that time. But the interest, which has accrued pend ing this suit, is mixed with the principal; and that interest, or, in other words, the amount due as income to the tenant for life, must be deducted, in order to ascertain what amount of principal is left in the hands of the new trustee. On the other hand, the amount of principal in the hands of the new trustee must be ascertained, in order to decide what income is due to the tenant for life; because she is not entitled to á larger amount of income between the 26th of August, 1818, and the time when the new trustee was appointed, than she will be entitled to after that time. The whole loss had then occurred, although the precise amount of. it could not be then ascertained.

It appears that the interest, at the time of the former decree, was computed for the period of one year, two months, and eleven days. Supposing the amount received by the new trustee, by force of that decree, to be 26,000 dollars ; the proportion of it due to the tenant for life, as interest for the period before mentioned, and ' * 367 ] upon the * principle above stated, would be 1742 dollars, 50 cents. This sum, deducted from 26,000 dollars, would leave 24,257 dollars, 50 cents, as the new capital; and this new capital would give 1455 dollars, 45 cents, annual interest at six per cent.; and at this rate, the interest for one year, two months, and eleven days, would make the aforesaid sum of 1742 dollars, 50 cents. We have assumed here a certain sum, for one that is uncertain, in order to explain the principle ; but whatever shall prove to be the value of the estate and effects received by the new trustee, it can be easily apportioned between the tenant for life and the reversioner, by the above mode of computation.

We are next to consider how the value of the estate and effects, received by the new trustee, shall be ascertained; and this question is connected with some others, that are suggested in the report 01 representation of the trustee. The property now in his hands is not to be considered as purchased by him. It is apparent from his report, that a considerable part of it is of such a description, that he would not, and ought not to have voluntarily invested the trust fund in it. Although conveyed to him by the former trustee, it is to be considered as if taken in execution ; being all that could be obtained from the former trustee, towards the sum due from him.

The new trustee ought to dispose of this property, as he would of merchandise, or any other effects, taken in execution, and invest the proceeds in productive real estate, or in public stocks, for the benefit of the parties interested therein, according to the provisions of the will. If any part of the real estate is now productive, and such as he would purchase in the exercise of a sound discretion, if he had money in his hands to be invested, he will of course retain that part. But it is very clear that he ought not to retain any, that lie would not think it proper to purchase for that purpose.

He will not, of course, hold any estate subject to the dower of Mrs. Winslow. This would be doing injustice * to the tenant for life, who is entitled to have the [# 368 ] whole fund made productive for her benefit, as far as possible without prejudice to the reversioner. If he could invest a part of the fund in such a reversionary interest, he might with the same reason invest the whole; and in this way the whole income, instead of going to the tenant for life, as intended by the testator, might be in effect appropriated to her son, and go to increase the value of his reversion. If the trustee can purchase Mrs. Winslow’s right of dower in any part of the estate in his hands, on such terms as to make the estate, when thus disencumbered, productive in proportion to its cost, and an advantageous investment of the fund, it is undoubtedly allowable and proper for him to do so. It would be no more than investing a like amount of the fund in any other real estate.

If this cannot be done, he will find it necessary, in order to comply with the directions of the will under which he is acting, to sell the whole as soon as it can be done upon reasonable terms, and to invest the proceeds in public stocks, or in some real estate that will produce a present income in proportion to its cost.

In all this he needs no direction or order from the Court. He is to follow the directions of the testator, who had a right to prescribe, and has prescribed, the course to .be pursued in this respect. The trustee incurs no responsibility, whilst pursuing his authority with good faith and sound discretion, and exercising the same diligence, which every prudent man would bestow on his own affairs.

As to the question of repairs upon the real estate, if the trustee should purchase a dwelling-house or other building, the necessary expense of putting it in a condition to be leased might well be con sidered as part of the original cost or purchase money; whilst the expense of keeping it in repair afterwards, would in common cases be a charge on the income.

The costs, awarded against Mr. Winslow, must be considered as received by the new trustee, and included in [ * 369 ] * the payment made to him. This amount he must pay over to the complainants in this suit. He must also pay out of the funds in his hands the necessary and reasonable expenses of the suit against Winslow. These expenses, being incurred for the benefit of both the parties interested in the fund, are a proper charge upon the whole, and to be deducted before any partition or apportionment between them.

After the trustee has ascertained, by a sale or otherwise, the actual value of the estate and effects that have come to his hands (exclusivo of any interest, rent or income received by him), he will deduct therefrom the costs and expenses of the suit, as above directed ; and will divide the residue between the tenant for life and the reversioner, according to the rule of computation above stated. He will then pay over to the complainants Parsons and his wife, in money, the amount that shall appear to be due to them, as income upon that computation; and the residue will be retained in his own hands, as the capital or principal sum, to be disposed of according to the will of the testator, John Gray.  