Opinion
July 2, 1917.
Babcock Gregg [ W.W. Gregg of counsel], for the appellant.
Stanchfield, Lovell, Falck Sayles [ Henry B. Collin of counsel], for the respondent.
Jesse Owen died in the year 1900, leaving a will containing the following provision: "After all my lawful debts are paid and discharged, I give, bequeath, and devise to my wife, Emily B. Owen, all of my real and personal estate, that I may die possessed of, during her lifetime, with the power of disposing of the personalty with a view to her personal use and maintenance; with remainder over in fee to my daughter, Minnie W. Frost, to her and her heirs forever." The daughter of the testator, Mrs. Frost, the wife of the appellant, was named as sole executrix of the will. She qualified and continued in the performance of her duties as such executrix until her death in the year 1903. She never had any accounting. After her death, and in the year 1903, the appellant, Mr. Frost, and Samuel Thorp were appointed administrators with the will annexed. Mr. Thorp appears not to have taken any active part in the administration of the estate and died in the year 1910. Neither administrator with the will annexed ever had any accounting until the present proceeding was instituted in the year 1916 on the petition of Emily B. Owen, the widow of the testator. After the death of Mr. Owen his widow took up her residence in the home of Mr. Frost, consisting of himself, his wife, and son and daughter. Within a few months after the death of Mr. Owen they moved into a residence owned by Mrs. Owen, she constituting one of the family. This condition existed after the death of Mrs. Frost in 1903, and until after the marriage of Mr. Frost's daughter in 1915. Then she went to live on a farm which during all the years mentioned had apparently been owned by her son and herself. Mrs. Owen some time before the death of Mrs. Frost conveyed to her the property where she and the Frost family were residing in the city of Elmira, reserving, however, a life estate therein.
In his account the appellant charges himself with $13,438.87 as the principal of the estate, and $9,516.65 as interest thereon and credits himself with payments of $16,730.43. These payments were mainly for household and living expenses of the family of Mr. Frost including Mrs. Owen during all the years when he was administering the estate and are sought to be justified on the theory that Mrs. Owen expressly authorized him to pay the household and family expenses out of her income. It also appears that she during the same period received as her share of the income of the said farm $4,930.01 which was turned over to Mr. Frost and mingled with the income of the estate and was all used for the common purpose of supporting the family and paying their living expenses. Produce in kind was likewise supplied from the farm from time to time for the use of the family.
The surrogate sustained the objections to the family living expenses and after taking into consideration what had been received by Mr. Frost both from the income of the estate and from the income of the farm charged him with a balance of income on hand of $6,261.66. This balance of income the decree directs the appellant to pay over to Mrs. Owen. It also directs him to turn over to her the principal of the estate consisting of cash, securities, furniture, and other property, and to deliver to her a deed of a life estate in certain real property to which he as administrator had taken title under mortgages held by the estate.
There is no serious contention that all of the income belonging to Mrs. Owen which came into the hands of Mr. Frost has been used by him in the manner claimed for the expenses of the family and for their support and maintenance. The question before the surrogate was whether such expenditures had been authorized by Mrs. Owen. After an examination of the record we are convinced that such authority has been established so far as the income is concerned, by a clear preponderance of the evidence. Mrs. Frost during her administration of the estate had used the income thereof for the support and maintenance of the family with the full knowledge and acquiescence of Mrs. Owen. This is clearly established and there is no contradiction thereof. It was undisputed by Mrs. Owen herself as a witness. She never required Mrs. Frost to account and there is no indication that she ever expected her to do so. She was apparently content to live with her daughter and to allow her income to be used by her daughter for the benefit of her daughter's family. Mr. Frost testifies that after the death of his wife, Mrs. Owen told him to conduct the affairs in the same manner as her daughter had done and to pay the household expenses out of her income in the same manner as her daughter had done before her death. The daughter of Mr. Frost testifies to the same thing. They do not testify that Mrs. Owen authorized the expenditure of the principal for any purpose. Mrs. Owen's testimony is not positive or convincing. She was eighty-six years old at the time of the trial and so infirm as not to be able to attend court, her testimony being taken at the farm where she was living. Her statements were somewhat vague and indirect and do not squarely meet the positive testimony of Mr. Frost and his daughter. But beyond all this are the circumstances and probabilities of the case which seem to us to forcibly substantiate the claim of the appellant. Mrs. Owen clearly knew the disposition made of her income by her daughter during her lifetime. After the death of the daughter the family continued to live in the same manner and style and with no change of relationship. She permitted her daughter's husband to receive her personal income from her farm knowing that he must have been using it as well as the income from the estate for the support of the family as her daughter had done. It is unreasonable to suppose that with her relations to his family unbroken she expected any different disposition to be made of her income or that the family was being supported from any other source after her daughter's death than before. Mr. Frost was engaged in no business and had very little individual income and it is quite apparent that Mrs. Owen must have known during all of these intervening years that she was practically supporting the family. She made no remonstrance. She does not claim to have ever asked Mr. Frost for a statement or explanation but she was apparently willing to live as one of his family and to devote her income to its support in return for the advantages which his home offered to her until after the marriage of his daughter to whom she seems to have been deeply devoted and upon the departure of whom from the family a change in her relations with Mr. Frost occurred and she took up her residence on the farm owned by her son and herself. Having consented to the disposition of her funds during the years when she was a member of the Frost family for its maintenance as we are convinced she did, it is now too late after her relationship with that family has terminated to seek a different disposition thereof. The contention of the appellant that the income of the estate has been disposed of according to the express directions of Mrs. Owen is sustained and the decree should be modified so as not to require the payment of any income.
The decree is also criticised because it directs that the corpus of the estate be turned over to Mrs. Owen unconditionally. In a case like this where the beneficiary is something more than a life tenant and has power to use in his discretion some portion of the principal for his support he is as a general rule entitled to the custody of the fund without security. ( Matter of McDougall, 141 N.Y. 21, 26; Matter of Grant, 40 N.Y. St. Repr. 944; Matter of Ungrich, 48 App. Div. 594.) But the authorities likewise recognize the principle that provision may be made for the adequate protection of the corpus of the estate in any case when the circumstances disclose a menace to the rights of the remainderman. ( Matter of Ungrich, 48 App. Div. 594, 597; Getman v. McMahon, 30 Hun, 531; Smith v. Van Ostrand, 64 N.Y. 278, 286.) In this case a proper safeguarding of the fund requires in the discretion of the court that it should not be delivered to respondent. No injustice will result to any one, but an injustice may be obviated by such precaution. The decree should, therefore, be further modified so as to direct that the money and securities belonging to the corpus of the estate shall be delivered to the successor of the appellant who shall hold and invest such money and securities and pay the income thereof to the respondent and such portion of the principal as the surrogate may direct "with a view to her personal use and maintenance" as contemplated by the will.
The decree should be modified in accordance with this opinion and as so modified affirmed, with costs to both parties payable out of the estate. The court disapproves the ninth, tenth, fourteenth and fifteenth findings of fact as made by the surrogate and finds that all of the income of the estate received by the appellant has been disbursed by him with the authority and consent of the respondent.
All concurred.
Decree modified in accordance with opinion, and as so modified unanimously affirmed, with costs to both parties payable out of the estate. The court disapproves the ninth, tenth, fourteenth and fifteenth findings of fact as made by the surrogate, and finds that all of the income of the estate received by the appellant has been disbursed by him with the authority and consent of the respondent.