It is therefore certain that the plaintiff cannot recover as an element of the damages any part of the funeral expense, unless, by reason of such expense, the beneficiaries of the action have sustained pecuniary injury. This is illustrated and enforced in the case at bar, for it affirmatively appears that the wife, for whose benefit the action is brought, had not paid the funeral charge and could not be made liable therefor. In a like case it is held that the plaintiff may prove and recover the amount of the necessary funeral expenses, "if the law imposes upon the relatives for whose benefit the suit is brought the obligation to bear them." Murphy v. N. Y. C. & H. R. R. R. Co., 88 N. Y. 445.

The authoritative implication of that case is that the damages would not include the funeral expenses, or any part thereof, if no obligation to pay rests upon the relatives in whose behalf the recovery is made. The same thought is contained in Matter of McDonald, 51 Misc. Rep. 318, 101 N. Y. Supp. 275, in which the learned surrogate expressly assumes that the payment of the funeral bill from the proceeds of the recovery is only to be had where the deceased leaves no estate. An attempt by the accountant in the action in which he was plaintiff to include in his recovery the funeral expenses would have been adequately met by proof of the facts recited supra. It would then be a repulsive result if the provisions of section 1903, quoted supra, were to be so construed that the award made to indemnify the persons for whom the action was brought was burdened with the payment of an item for which none of them was liable, which could not be included in their recovery, and which was already paid from a fund devoted to its pay

ment.

A statute is not to receive a construction which involves a palpably unjust or absurd effect, if by the arts of construction a just and ra tional meaning can be impressed upon it. At common law, undisturb ed by legislation in this state, the general personal estate of the deceased is chargeable with the burden of his funeral expenses. The provision with respect to the payment of the funeral expenses from the recovery in an action for negligent killing of the deceased is so distinct a departure from the common law as to invoke the familiar rule that its provisions in derogation of that law shall not be extended beyond their obvious and necessary intent.

[2] In the statute in question a permission or direction to deduct can only intend that the plaintiff shall withdraw or take back from the fund held by him in trust a sum which it is his duty to pay from that fund. In the relation in which the word "deduct" is here found, it cannot reasonably contemplate that a custodian of the fund can reduce the same by the withdrawal of a sum which he, in his character as plaintiff, has not been called upon to pay, and will never be required or permitted to pay.

The plaintiff is authorized in this section to deduct the reasonable expenses of the action. The argument that he must deduct the funeral expenses from the fund realized in the action, even when they have been discharged by the use of another fund, which was specifically devoted to their payment, would require a like interpretation as to the payment of the expenses of the action, if they had been

paid by a benevolent volunteer, who renounced all right to reimbursement. No interpretation of the act is conceivable which would allow the plaintiff to subject the recovery to the payment of any item which was legally payable from a source other than the sum recovered.

It cannot be said that the plaintiff, because he paid the funeral bill, may deduct its amount from this recovery. His attitude must be the same as if another person had been executor of the general assets, and he was an administrator to maintain the action. As executor of the general estate, and plaintiff in the action, he was trustee of inconsistent and separable trusts. In his character as plaintiff he did not pay the item. It was as a stranger to the duty which he bore as plaintiff that he paid it, and he paid it from a fund other than the fund in his charge as plaintiff. More than that, it was his duty to pay it from the other fund.

The conclusion is that the statute only contemplates deduction of funeral expenses from the recovery when the beneficiaries of the recovery are under the obligation to pay them, and that therefore the obligation cannot exist where the expense has been paid from a fund which was charged with its payment. Even if there were in this statute an express and inevitable requirement that the funeral expenses were to be paid from the recovery, it could be modified or waived. If the testator, instead of creating a fund of $100 for the purpose of defraying his funeral expense, had provided a fund equal to that expense and had made that payable to his general estate, could it be doubted that by his act, and especially by the later act of his representatives and legatees in accepting the amount of the funeral benefit, there would be brought about a waiver of any statutory provision, however stringent, by which the general estate was exempted from the payment of the funeral expense?

So when, by his will, he devoted his whole personal estate to the payment of his funeral expense, and gave to his nephews a residue. which could only be reached by subtracting the amount of such expense, does it not result that he has impressed a like waiver upon his estate and those who may participate therein? The credit for funeral expenses which the executor has suspended in his account must be made a credit to him in the settlement of his accounts with the beneficiaries of the general estate, and the amount now held by him should be paid to the widow.

Decreed accordingly.

(88 Misc. Rep. 442)

In re FANONI et al.

(Surrogate's Court, Kings County. December, 1914.)

1. TRUSTS 274 - CAPITAL AND INCOME DEPRECIATION OF SECURITIES DISPOSITION OF INTEREST.

In the absence of a clear direction in a will to the contrary, the rule is that, where investments are made by a trustee as authorized by the will, the principal must be kept from any loss by payment of premium on securities having only a definite term to run; but, if the bonds are reFor other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

ceived from testator's estate, the whole interest should be treated as income and paid over to the life beneficiary.

[Ed. Note. For other cases, see Trusts, Cent. Dig. §§ 389-392, 493; Dec. Dig. 274.]

2. TRUSTS 274—CAPITAL AND INCOME "RECEIVED FROM THE ESTATE OF THE TESTATOR."

The intrinsic meaning of the words "received from the estate of the testator," as used in such rule, forbids their being interpreted to mean "received in kind from the testator's estate as a specific bequest in trust." [Ed. Note. For other cases, see Trusts, Cent. Dig. §§ 389-392, 493; Dec. Dig. 274.]

Where a statement of the rule governing a case decided by the court of last resort is accompanied in the opinion by an equally express statement of an alternative rule, not essential to the decision, but closely related to the subject discussed, and declared as a guide for future conduct, the latter statement will be deemed controlling by trial courts in future litigation.

[Ed. Note. For other cases, see Courts, Cent. Dig. § 335; Dec. Dig. 92.]

4. TRUSTS

273-SINKING FUND-DEPRECIATION OF SECURITIES-DISPOSI

TION OF INTEREST.

Testator bequeathed $300,000 to his executors in trust, to receive the income and apply same to the use of his daughter for life, and on her death invest the trust in authorized securities. To make up such fund, the executors were also authorized to set apart securities in which his estate was invested at the time of his death. Held that, in the absence of any suggestion in the will to the contrary, the beneficiary for life was entitled to all the interest payable on securities thus set aside, and that the trustees were not required to withhold portions of the interest to form a sinking fund sufficient to provide against the wearing away of the premium value of the securities as they approached maturity.

[Ed. Note.-For other cases, see Trusts, Cent. Dig. § 386; Dec. Dig. 273.]

5. TRUSTS 275-TESTAMENTARY TRUST-SINKING FUND.

Where a fund bequeathed in trust is in the form of specified securities, there can be no sinking fund, unless the will so provides.

[Ed. Note. For other cases, see Trusts, Cent. Dig. § 393; Dec. Dig. ~~275.]

Judicial settlement of the accounts of Emily S. Fanoni and others, as trustees under the will of Abbie A. Merrill, deceased, for Florence Harrison. Decreed according to opinion.

Wingate & Cullen, of New York City, for trustees.

Francis E. Laimbeer, of New York City, for Florence Harrison.

KETCHAM, S. The will under which the trustees account is in part as follows:

"Sixth. I give and bequeath to my executors hereinafter named, the sum of three hundred thousand dollars ($300,000) in trust, nevertheless, for the following uses and purposes:

"(a) To receive the income and profits thereof, and to pay and apply the same to the use of my daughter, Florence Harrison, in equal quarterly payments, during the term of her natural life."

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

Then follow dispositions of the principal fund upon the death of the daughter named.

"Seventh. I hereby authorize and empower my said executors and trustees hereinafter named, to invest the said trust in such securities as savings banks are now or may hereafter be allowed by law to invest their deposits in, and to change such investments from time to time in their discretion. In addition thereto, if in the joint judgment of my three executors, or such of them as may qualify, or the survivors thereof, it shall be wise and proper so to do, I authorize and empower them in order to make up the said fund of three hundred thousand dollars ($300,000) to be held in trust as aforesaid, to set apart out of the securities in which my said estate may be invested at the time of my death, a portion thereof which, shall in their judgment be worth at their then market value, said sum of three hundred thousand dollars ($300,000) or any part thereof and I authorize and empower them, in case they shall set such securities aside, to hold the same as legal investments of the portion of said trust fund at which they shall have valued the securities so set aside, during such time as in their joint judgment may be wise, and for the best interests of said trust fund.

"This is not a direction to said executors to set any part of said securities aside for this purpose, but is an authorization to them to so do, if they think it wise and proper, and to constitute any such securities so set aside as legal investments of said trust fund by my said executors and trustees."

It is stipulated that the trust fund contemplated by the provisions quoted was established by the trustees

"and that pursuant to the authorization and power contained therein the trustees set apart securities owned by the decedent at the time of her death, which at their then market value, with an adjustment of cash amounting to approximately $100, aggregated $300,000, as the principal of said fund, and that among these securities were bonds having a fixed date of maturity, of the market value of $270,000, and of the par value of $251,000."

[1, 2] The question is presented: Is the life beneficiary entitled to all the interest payable according to the obligation contained in the bond, or are the trustees required to withhold portions of such interest. as received in order to form a sinking fund sufficient to provide against the wearing away of the premium value of the bonds which will result as they approach maturity?

In Matter of Stevens, 187 N. Y. 471, 80 N. E. 358, 12 L. R. A. (N. S.) 814, 10 Ann. Cas. 511, the court, in its prevailing opinion, after a review of earlier cases, says:

"We, therefore, adhere to the rule declared in the Baker Case [New York Life Insurance & Trust Co., 165 N. Y. 484 (59 N. E. 257, 53 L. R. A. 544)], that in the absence of a clear direction in the will to the contrary, where investments are made by the trustee, the principal must be maintained intact from loss by payment of premium on securities having only a definite term to run, while if the bonds are received from the estate of the testator, then the rule in the McLouth Case [McLouth v. Hunt, 154 N. Y. 179 (48 N. E. 548, 39 L. R. A. 230)] prevails, and the whole interest should be treated as income."

This is followed by language which indicates a design, not only to set forth the basis upon which the pending controversy was determined, but, further, to set up an express standard for general acceptance by trustees. In this regard the opinion proceeds:

"These rules may not work perfect justice in all cases, and we fully appreciate that there may be inconsistencies between them; but it is far better that they should be uniformly adhered to, even at the expense of a particular case, than that the administration of estates should be subjected to constant litigation and disputes."

The value of this authority is that it makes easy a hitherto troublesome problem, if its opinion can be followed, not only as to the question therein actually determined but also as to its obiter instruction. It would enable trustees, unless otherwise constrained by the will, to mould their administration of wasting securities to fit the obvious fact either that the securities were purchased by them or were found among the testator's assets.

[3] Where in the court of last resort the rule governing the case decided is accompanied by an equally express statement of an alternative rule not essential to the decision, but closely related to the subject discussed, the latter statement, even though made aside from the point of adjudication, may well constrain the judgment of a trial court. A dictum doubtless becomes a dictate when it is explicitly declared to be the guide for future conduct.

In Matter of Guaranty Trust Co., 131 App. Div. 658, 116 N. Y. Supp. 147, the court, quoting the rule of the Stevens Case in both of its branches, says:

"This definite rule was made by the Court of Appeals upon an examination of all the cases, and by a divided court, with a strong dissent, showing that the matter had been advisedly passed upon as a guide to future trustees. As these bonds were bought by the trustee, we are bound by the decision cited."

Whether or not a vigorous dissent from the conclusion reached in a prevailing opinion can impart to an admonition which runs with that conclusion any more of vitality or sanction than a unanimous approval would bestow, the law of the state must be taken by this court from the Stevens Case, viz., that the life beneficiary is entitled to the whole interest payable upon bonds of the character here involved if such bonds were received (by the trustees) from the estate of the testator, unless a direction in the will to the contrary be found.

The will now under examination at least does not contain any suggestion that the beneficiary for life shall receive less than the whole interest. What, then, is the true sense of the words which the Court of Appeals makes the test, "received from the estate of the testator"?

It has not been possible for this court to divert them from their natural meaning. It is sought by the accountants to impose upon them the same effect as if, instead of them, the phrase had been used, “received in kind from the testator's estate as a specific bequest in trust." This is forbidden by the intrinsic meaning of the words. The proposed interpretation cannot be fitted to them. It is made impossible by the fact in the McLouth Case. That fact was the matrix which gave the rule its form and life. The rule itself cannot be read, except with the fact which provoked, and therefore characterized, it.

The opinion in the Stevens Case did not assume to reveal the rule. It stated it as a doctrine already taught and established in the earlier case. Hence, when we find that in the McLouth Case the bonds there in question were not bequeathed in trust specifically, but were received by the trustees under the direction of the surrogate to set them apart to the trust fund, it would offend reason to suppose that the declaration of that case, confirmed and defined in the subsequent opinion, was confined to conditions which were not found therein.