and 122 New York State Reporter execute such an intention, we may not search to the contrary, because to do so would be endeavoring to find an illegal purpose. Matter of Rogers, supra. I quote from Mr. Justice Cullen in that case: "If from the will of the testator it is apparent that he intended that the life tenant should receive as income that which, as a strict matter of law, would be principal, undoubtedly that intent should govern, for the testator could give the life tenant the power to consume the whole principal. Such was the case of Matter of James, 146 N. Y. 78 [40 N. E. 876, 48 Am. St. Rep. 774]. But if the intent is in the opposite direction, that that which the law holds to be income shall be treated as principal and go to the remaindermen, it is in effect an accumulation and wholly void. Our laws forbid accumulation except for the benefit of infants in being during their minority. No principle of public policy declared by our statute law has been more firmly and rigidly upheld by the courts than this inhibition against accumulations. The accumulation must not only be for infants, but it must be exclusively for infants-so much so that, if an adult or person not in being is to share in the accumulation, then a trust for the accumulation is void." It is also urged by contestants that the life beneficiaries, by virtue of former accountings and decrees entered therein, in which it appeared that the expense of carrying the foreclosed properties had been charged to principal, are estopped from now claiming that any part of the proceeds of such properties belongs to income. But in this claim there is no merit. As to the effect of such decrees, all that can be said is that they were a justification to the trustees in continuing to carry the foreclosed properties in the principal account. The allowance of their accounts by decree created the law of the case only to the extent of justifying the trustees' action in relieving them from personal responsibility therefor. The rights in a fund not then distributable could not have been determined by such decrees. They judicially settled and allowed what had been done, and what was then immediately ready to be done, in the way of distribution, and were res adjudicata to that extent. The future conduct of the trustees and the future distributions were subject to future judicial investigation. Matter of Hoyt, 160 N. Y. 607, 55 N. E. 282, 48 L. R. A. 126; Rudd v. Cornell, 171 N. Y. 114, 63 N. E. 823; Code Civ. Proc. §§ 27242734. These former decrees were correct. The surrogate allowed and adjudicated the accounts as presented. The carrying charges of foreclosed properties were properly paid out of principal for the time being, but, now that the properties are sold, the account is closed, liquidation takes place, and a distribution is to be had. This is the first time that the question of the rights of the life beneficiaries and the remaindermen in the proceeds of sale could have been adjudicated. The rule to be applied to the distribution of these proceeds, I think, is clearly and unequivocally laid down in the case of Meldon v. Devlin, 31 App. Div. 146, 53 N. Y. Supp. 172; and the rule so established, together with other questions, was certified to the Court of Appeals, and was there affirmed. 167 N. Y. 573, 60 N. E. 1116. This authority seems to have escaped the notice of all of the counsel in this case. Nevertheless this is not strange, because the compilers of our working digests seem to have failed to appreciate the importance of the rule established. I quote from the prevailing opinion of Mr. Justice Barrett in that case: "We think the court below rightly disposed of the proceeds of the sale of the water lots. These were two lots upon which the trustees originally held two of the Phillips mortgages, aggregating about $25,000. In 1885 the mortgages were foreclosed, and the trustees bought in the property. In 1893 Jeremiah Devlin, as surviving trustee, sold it to the defendant Felix for a sum less than the principal and interest of the original mortgages. The judgment directs that the proceeds of sale be apportioned between the prin cipal and income of the trust fund in the ratio which the aggregate principal of the mortgages bears to the whole unpaid interest. This was correct. The land represented the original investment in the mortgages, and its proceeds should be distributed in the same manner as though the mortgages were being foreclosed for the first time for the amount of the purchase price. It is well settled that where the interest upon mortgages is unpaid, and the premises are eventually sold, the sum received should be ratably apportioned between principal and income. 2 Lewin, Trusts (Am. Ed. 1889) p. 1228; Matter of Moore, 54 L. J. Ch. 432; Hagan v. Platt, 48 N. J. Eq. 206 [21 Atl. 860]. This is not a case of devastavit, and cases like Cook v. Lowry, 95 N. Y. 103, have no application." Under this rule the only unknown quantity to be found is the amount of income invested in the foreclosed property. The amount of principal is known. And when we find the amount of income, or, rather, the rate at which income should be computed, the operation of the rule, then, is a sum in arithmetic. In this case the mortgages which were foreclosed bore at the time of foreclosure 7 per cent. interest, but since then the value of money has continually depreciated, and therefore it would not be equitable to continue to compute the interest at the original rate. After careful consideration of the prevailing rates which have obtained for the use of money during the past 25 years, I find that in this case interest may properly be computed upon the principal put into the foreclosed properties at the rate of 5 per cent. per annum. So applying the rule above stated to the facts and figures of this case as I find them, the result is that the life tenants would be entitled to more than the surplus over and above the principal moneys invested in the properties. This surplus would give the life beneficiaries interest at the rate of between 4 and 41⁄2 per cent., and, as they are satisfied to have their interest adjusted on that basis, the accounts will be settled accordingly; returning to principal all the principal invested, and giving to the life beneficiaries the surplus of the proceeds of sale. The interests of the representatives of the deceased life tenants will have to be adjusted by an allowance to them of a proportionate amount of interest calculated to the date of death. Decreed accordingly. (43 Misc. Rep. 230.) and 122 New York State Reporter In re LUTZ'S ESTATE. (Surrogate's Court, Erie County. March, 1904.) 1. DESCENT-ILLEGITIMATE CHILDREN. Where an illegitimate child dies intestate after his mother, and leaves, him surviving, no father, widow, descendants, or brother, but leaves an illegitimate sister of the full blood, she takes, in the right of her mother, the whole estate, under Code Civ. Proc. § 2732, subd. 9, to the exclusion of the next of kin of her father, though the latter had, in Germany, adopted the son at an early age-even though the adoption was legally made. In the matter of the estate of William C. Lutz, deceased. Application for commission to take testimony of foreign witnesses. Application denied. George L. Lewis, for petitioner. Hammond & Hammond, for Paulina Krueger, administratrix. MARCUS, S. This is an application made by Carl Schwinghammer for a commission to take the testimony of various witnesses named in the application, all residents of Germany, to which the administratrix, Paulina Lutz Krueger, has filed objections. William C. Lutz, the intestate, died in Buffalo, N. Y., January 23, 1902, leaving no father, mother, widow, descendants, or brother, except Paulina Lutz Krueger, his illegitimate sister, of full blood. William C. Lutz and Paulina Lutz Krueger were children of the same father and mother, who were never married. Both children were born out of wedlock and illegitimate. William Gottlieb Lutz, their father, was born February 24, 1815, in Germany, and died there on May 13, 1873. It appears that said William Gottlieb Lutz on September 30, 1866, was married to Elisa Frey in Germany, who died on March 6, 1895, without children. Rosina Marie Schaaf, the mother of William C. Lutz and Paulina Lutz Krueger, died intestate November 26, 1880, and left no other descendants. The intestate, William C. Lutz, was born October 27, 1842, illegitimately. He came to the United States about the year 1862, and became a citizen thereof, and so remained to his death. His actual domicile was in Buffalo, N. Y., at the time of his death. Paulina Lutz Krueger was born August 31, 1844, illegitimately, at Eslingen, Germany. She was appointed the administratrix of the estate of William C. Lutz, the deceased intestate, at the time of his death. It is claimed that the father of the deceased intestate adopted him under the laws of Germany in his early boyhood days, and that by virtue of such adoption the distribution of the decedent's estate would pass, not to his illegitimate sister of full blood with himself, but to the next of kin of his father; the latter being the grandchildren of the brother of William Gottlieb Lutz, and the grandnephew and grandniece of the father of the illegitimate deceased; thereby using the father of the illegitimate as a conduit of title to pass the property on to the legitimate next of kin of such putative father. 1. See Bastards, vol. 6, Cent. Dig. §§ 251, 262. My conclusion is to deny the application on the ground that subdivision 9 of section 2732 of the Code of Civil Procedure, which is chapter 236, p. 257, of the Laws of 1845, provides that the relatives. of the deceased on the part of the mother shall take in the same manner as if the deceased had been legitimate, if the mother of such deceased be dead. Assuming the adoption claimed by the applicant to have actually taken place in conformity with the laws of Germany, it nevertheless would not have legitimated William C. Lutz through such act of adoption by his putative father, William Gottlieb Lutz; and such act of adoption by the putative father would not legitimate William C. Lutz to the extent of depriving his mother, and, through her, his sister of full blood, of her right to distribution under the laws of the state of New York, and thus carry the distribution over to the Schwinghammer branch, who are the grandnephew and grandniece of William Gottlieb Lutz, the father of the illegitimate intestate. My conclusion is that, if the adoption had taken place in the foreign country, it nevertheless would not entitle the collateral heirs of the putative father to receive the personal property as against the sister of full blood, who is the only living descendant of the mother of the illegitimate deceased, and who alone is entitled to distribution under the laws of the state of New York, which direct the inheritance to go to the children of the illegitimate intestate on the part of the mother, if she be dead at the time of the death of the illegitimate. Decreed accordingly. (Surrogate's Court, Rensselaer County. March, 1904.) 1. ADMINISTRATORS WITH WILL ANNEXED-RIGHT TO LETTERS. Code Civ. Proc. § 2643, relating to letters of administration with the will annexed where there is no executor qualified to act, provides in subdivision 3 that where the residuary, principal, or specified legatee, or the guardian of a minor, entitled to letters, either do not exist or will not accept administration, letters shall issue to one or more of the next of kin. Held, that such provision must be limited to such of the next of kin as are entitled to share in the unbequeathed assets of the estate, and who are therefore persons interested therein, and a person having no such right is to be excluded. 2. SAME-EXECUTOR OF SOLE LEGATEE. Code Civ. Proc. § 2660, subd. 9, provides that administration in case of intestacy must be granted to an executor or administrator of a sole legatee named in a will whereby the whole estate is devised to such deceased sole legatee. Section 2643, subd. 2, gives the right of administration to one or more of the "principal or specified legatees." Held, that the sole legatee of an estate is entitled to take all that can be taken by a residuary, a principal, or a specified legatee, and hence his executor is entitled, under the above provisions of the Code, to letters of administration with the will annexed in preference to any other person. Applications by Agnes M. Goggin and Samuel Goggin for letters of administration with the will annexed upon the estate of Henry J. Goggin, deceased. Decree granting letters to first-named applicant. and 122 New York State Reporter Thomas S. Fagan, for applicant Agnes M. Goggin. HEATON, S. Henry J. Goggin died testate, naming his mother, Maria A. Goggin, sole legatee and executrix. The will was probated. The mother qualified as sole executrix, and shortly thereafter died testate, naming her daughter, Agnes M., sole legatee and executrix. Such will has been duly proved, and the daughter, Agnes M., has qualified as sole executrix, and now petitions to be appointed administratrix cum testamento annexo on the estate of her brother Henry J., and her only brother, Thomas, joins with her in such application. The father, Samuel Goggin, also files a petition, and applies for such appointment, which is opposed by his two surviving children. The father admits that he has no interest in the estate of Henry J., but bases his application on the reading of subdivision 3, § 2643, of the Code, which, when there are no persons qualified to take under subdivisions 1 and 2, requires that letters be granted to one or more of the next of kin, and claims that, as he is nearer in kin to his son than is the sister or the brother, he is entitled to letters before them. The petitioner, Agnes M., alleges that she has become the sole owner of the estate of her brother through his will and that of her mother, and that a proper construction placed on section 2643 and subdivision 9 of section 2660 will require letters to be issued to her as executrix of a sole legatee. Unfortunately the precise question here raised has not been decided by any appellate court since some recent important amendments to these sections of the Code, and a careful study of the decisions of the surrogates of the state discloses the fact that such decisions are not entirely harmonious. Section 2643 of the Code, which provides for granting letters with the will annexed, is plainly based upon the principle that he who has the interest in the estate which most needs protection from waste, extravagance, and incompetency shall be first entitled to control and manage such estate, and therefore the residuary legatee is given the prior right to administer. When experience showed that often an infant was a residuary legatee, such right was extended by the amendment of 1901 to his general guardian; thereby again indicating the intention of the Legislature to protect in such appointment a vested interest. Next in order of priority is the principal or specified legatee, and also by the amendment of 1901 the general guardian of an infant principal or specified legatee, following the principle that he who had an interest to protect should be in a position to furnish it protection. It will also be noticed that it was not the greatest money interest that was recognized, for often the general legatees have a greater money value in their interests than have the residuary legatees, but it was the interest of the residuary legatees in the careful management of the estate, since usually expenses and losses fall solely upon the residuary estate, or, if there be no such estate, then upon the estate given to the general legatees. This view of the principle upon which the section is founded is confirmed by the one case which has gone to the Court |
