
    In the Matter of the Petition of Hugh M. Stanfield, for the Payment of Interest Upon a Certain Legacy.
    
      (Supreme Court, General Term, First Department,
    
    
      Filed May 13, 1892.)
    
    1. Will—Bequest in trust—Interest. ;
    
      A beneficiary under a will by which a sum of money is bequeathed in trust to invest and pay over the interest orlncome to him, is entitled to the interest from the date of the testator’s death.
    
      2. Same—Rate to be allowed.
    Where the fund for such investment has not been set apart, and in the absence of facts showing that the estate earned the full legal rate of interest, it is within the discretion of the surrogate to determine what rate shall be allowed, reference being had to the percentage of income of the appraised' value of the personalty.
    Appeal from an order of the surrogate.
    
      John Notman, for guardian; Lowrey, Stone & Auerbach, for app’lt, The Knickerbocker Trust Company; William A. Boyd, for resp’t.
   O’Brien, J.

The petitioners, Hugh M. Stanfield and Henry Stanfield, are adult sons of Mark M. Stanfield, deceased, who died on May 28, 1890, leaving a last will and testament, in which it was provided:

“ After the payment of my just debts, I give and devise unto Gfeorge Otis the income of twenty-five thousand dollars for his life; and to my son, Hugh M. Stanfield, the income of twenty thousand dollars for his life; to Florestine Stanfield, wife of Henry B. Stanfield, during the life of herself and child, the income of twenty thousand dollars; to Henry Stanfield the income of ten thousand dollars, and to John C. Parcher the income of ten thou-, sand dollars; and I direct my executor hereinafter named to invest said sums in bond and mortgage or government bonds, and pay the income to the respective parties named.”

Pending a contest over the probate of the will, a temporary administrator was appointed and qualified July 25, 1890.

On January 20, 1892, the executor not having invested the principal sums, the income of which was devised to the two sons, Hugh M. and Henry B., they commenced proceedings before the surrogate by petition and nótice of motion for an order directing the payment to them of interest upon the ¡irincipal amounts.

The executor in answer to the petition shows to the surrogate that the principal sums had not been invested because the executor had never had in its possession sufficient funds to enable it to provide for the payment of debts, to pay legacies, and to set up the trusts provided by the will.

The questions submitted to the surrogate for decision were:

1. The devises being given “ after the payment of my just debts,” did they become effective, or could interest accrue on them before the debts were paid ?
2. Prom what time should interest, if allowed, be computed ?
3. At what periods should interest be paid?
4. At what rate should interest be computed? The surrogate decided that interest should be paid by the executor upon these bequests from the date of the death of Mark M. Stanfield; that such interest should be computed at the rate of three per cent per annum, and that payments of interest should be made annually.

Prom that decision these appeals are taken.

We regard the law as settled that as to general legacies they are not payable until one year after the issuance of letters on the estate, and that as to an annuity legacy, it begins to run from the death of the testator.

The question here presented is, what is the rule as to the bequests of income ? Are we to follow the one governing the payment of annuities, or of general legacies ?

In Cooke v. Meeker, 36 N. Y., 15, it is said: “The authorities would seem abundant, therefore, to sustain the doctrine, that when a sum is left in trust, with the direction that the interest and income should be applied to the use of a person, such person is entitled to the interest thereof from the date of the testator’s death.. . Especially is this so where, as in the will under consideration, it clearly appears to have been the intent of the testator that the legacy should be paid by a transfer of bonds and mortgages bearing interest at the time of his death.” Appellants insist that this statement is obiter, and in direct antagonism to the general rule and weight of authority holding that interest upon legacies commences to run only after the expiration of a year from the granting of letters testamentary ; that as respects legacies, a direction in a will that it be paid with interest, but specifying no time from which interest is to be computed, requires, in the absence of any special circumstance, that interest commence only after the expiration of the year, except in certain cases of a testator who is a parent or stands in loco parentis to the legatee, in which case, if the legatee be not an adult, interest on the legacy should be allowed as a maintenance from the time of the death of the testator.

In this case, however, it must be remembered, as already stated, that the question is not as to when interest begins to run upon a legacy, or when an annuity is payable; the question being from what time interest upon bequests are payable.

Although some doubt was expressed as to the correctness of the rule stated in Cooke v. Meeker, supra, in two cases which arose and were decided by former surrogates, In re Lynch Estate, 52 How. Pr., 367; Nahmeus v. Copely, 2 Dem., 253, we no longer regard it, so far as this court is concerned, as an open question.

In Barrow v. Barrow, 29 St. Rep., 240, the cases are collated and discussed, and the rule as laid down in Cooke v. Meeker followed. This doctrine was applied by Mr. Justice Daniels, in deciding Pierce v. Chamberlain, 41 How. Pr., 501, and the same learned judge, in his opinion in Powers v. Powers, 16 St. Rep., 770, which was a decision of this general term, held that a beneficiary under a will bequeathing a fund to a trustee, in trust to invest the same and pay over the income, is entitled to such income from the time of the testator’s death, wliere the trust has been invested by the testator, and has yielded income from such time.

We are unable to see any distinction in principle between the case last referred to and the one at bar. It here appears that the income received within one year and eight months from the death of the testator was $30,029.95, which, according to the valuation of the personal estate, which was stated to be $317,766.66, would make a showing of interest herein about six per cent. If, however, we take the executor’s figures of the amount of income received, and the percentage which such income bears to the appraised value of the personalty, it is conceded to have been three and seven one-hundredths per cent.

It was within the discretion, therefore, of the learned surrogate, in the absence of facts showing that the estate earned the full legal rate of interest, to determine what amount should be allowed, reference being had to the percentage of income of the appraised value of the personalty.

We do not think that the learned surrogate was bound, to allow any greater percentage upon the facts appearing before him than the three per cent, granted. In other words it was a matter within the discretion of the surrogate, which upon the facts we do not find was unwisely exercised.

We think, therefore, that the order appealed from should be .affirmed, and inasmuch as all parties appealed from some part of the order, it should be without costs of appeal to any of the parties.

Van Bruht, P. J., and Ahbrews, J., concur.  