Opinion
January 23, 1935.
Miller, Hubbel Evans, for the executors.
M.J. Margaret Brahe, special guardian for infants.
Thomas M. Sherman, in person.
This is a proceeding for an executor's judicial settlement.
Thomas M. Sherman, an interested person, has requested that at this time a construction be had of the word "profits" as it appears in paragraph "eighth," subdivisions "C," "D" and "E," of the last will and testament of the testatrix. The word "profits" is used in the same manner in each of the paragraphs "C," "D" and "E," viz.: "I direct my said trustees to pay over the income and profits from one of the three equal parts of my estate, at such time and in such manner as to them seem best, to my son," etc.
It is the contention of Mr. Sherman that profits made from the sale of securities belonging to the estate should be credited to income and not added to principal.
This subject has received attention in several reported cases and there appears to be a uniformity of opinion that the additional word "profits" does not extend the gift beyond that which would be connoted by the use of the word "income" alone. ( Matter of Clark, 62 Hun, 275; Cross v. Long Island L. T. Co., 75 id. 533; Matter of Stevens, 46 Misc. 623; Stewart v. Phelps, 71 A.D. 91.)
It has been pointed out in numerous cases that under ordinary circumstances, a testator does not contemplate that his trustees will speculate with property of the estate and that increase in the value of securities held in trust is not "profit" within the usual meaning of the word.
If increase should be added to income then by the same token a loss should be deducted from income. This result is not one contemplated or intended by the testatrix. ( Matter of Gerry, 103 N.Y. 445; Matter of Eger, 139 Misc. 59.)
It follows that profits on sale of securities constitutes an increase of principal to be distributed to remaindermen at the proper time.
Decreed accordingly.