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StuMee in Bu6tne60 
 
 First Series^ No. 2. 
 
 ACCOUNTS OF EXECUTORS AND TESTAMENTARY 
 TRUSTEES: Lectures before the N ew York Univer- 
 sity School of Commerce, accounts and Finance 
 
 BY JOSEPH HARDCASTLE, C. P. A., PROFESSOR OF PRIN-" 
 CIPLES AND PRACTICE OF ACCOUNTS, SCHOOL OF COM- 
 MERCE, ACCOUNTS AND FINANCE. NEW YORK UNIVERSITY 
 
 
 Publications of the New York University School 
 OF Commerce, Accounts and Finance, New York, 1903. 
 
Copyright, 1903, by 
 NEW YORK UNIVRRi 
 
 N\^ 
 
 <J^' 
 
 
 ^ 
 
PREFACE. 
 
 This book has been written primarily for the aid of students. 
 It gives in substance the matter which I present in a course 
 of lectures at the New York University School of Commerce, 
 Accounts and Finance. For the students who hear these lec- 
 tures it will serve as a syllabus. The book, however, is more 
 than a syllabus, and the general reader will, I trust, find it a 
 
 CORRIGENDA 
 
 Page 1 6, last line, change has to have. 
 
 23, line 26, change distinguish to extinguish. . 
 
 45, line 21, change 186 10 to 1/610. 
 
 45, line 25, change 1567.50 to 1642.50. 
 
 48, line 9, change receive to exceed. 
 
 50, line 2, change per $100 to for $100. 
 
 62, in (7), change Paid Transfer T $500 to Paid Trans- 
 fer T $50. 
 
 62, in (7), change addition on Credit Side from $2050 
 to $1050. 
 
 70, in (9), change Paid A. Langstader $72.12 to Paid 
 A. Langstader $7512 
 
 71, in ( 14) , interchange debit and credit sides of account. 
 75, last line, change 54195 to 54159. 
 
 phraseology. The chief sources on which I have depended are, 
 the Code of Civil Procedure of the State of New York, and 
 "Chaplin on Express Trusts and Powers," with the kind 
 consent of the author of this latter work. 
 
 It must not be thought that this treatise will be of use only 
 in the State of New York, for the general principles of the 
 law are applicable throughout the United States. 
 
 Joseph Hardcastle, C. P. A. 
 
 New York City, October 28, 1903. 
 

 1 1 t f. 
 
PREFACE. 
 
 This book has been written primarily for the aid of students. 
 It gives in substance the matter which I present in a course 
 of lectures at the New York University School of Commerce, 
 Accounts and Finance. For the students who hear these lec- 
 tures it will serve as a syllabus. The book, however, is more 
 than a syllabus, and the general reader will, I trust, find it a 
 source of independent help and guidance in his study of the 
 subject. I have aimed to make it useful, not only to the teacher, 
 but also to the professional accountant. 
 
 The book has the following objects in view: 
 
 1. To bring the lawyer and the accountant into accord on 
 the subject, so that they may profitably co-operate in their 
 mutual work. 
 
 2. To give the accountant such a knowledge of both the 
 principles and practice of the law that he may do his work 
 intelligently, leaving, however, the legal guidance, the pro- 
 cedure, and the forms to be attended to by the lawyer. 
 
 3. To bring out prominently the distinction between cor- 
 pus and income. 
 
 4. To interpret mathematically sundry decisions of the 
 courts. 
 
 It has not been thought advisable to include the "sale of 
 real estate for payment of debts," since that subject pertains 
 to the surrogate. 
 
 With respect to the law portion, it is more a compilation than 
 an original work, as I deem ^t better to give it in approved 
 competent language than to give it less effectively in my own 
 phraseology. The chief sources on which I have depended are, 
 the Code of Civil Procedure of the State of New York, and 
 "Chaplin on Express Trusts and Powers," with the kind 
 consent of the author of this latter work. 
 
 It must not be thought that this treatise will be of use only 
 in the State of New York, for the general principles of the 
 law are applicable throughout the United States. 
 
 Joseph Hardcastle, C. P. A. 
 
 New York City, October 28, 1903. 
 
TABLE OF CONTENTS. 
 
 I. Classes of Business, and Their Contrast. 
 
 II. Businesses in which the Proprietors are 
 Legally Incapable of Conducting their 
 Businesses. 
 
 III. General Scheme of Executors' Accounts. 
 
 IV. Duties of Surrogates and Executors. 
 
 V. Executor's Inventory. 
 
 VI. Distribution of Assets and Principles of 
 Book-keeping. 
 
 VII. Legacies, and a Summary of the Prustciples of 
 
 Accounting. 
 
 VIII. Order of Distribution of Residue. Advance- 
 
 ments, Commissions. 
 
 IX. Investments and Realization of Property. 
 
 X. Offsets to Income and to Corpus. Apportion- 
 ment AND Adjustments of Expenditures. 
 
ACCOUNTS OF EXECUTORS AND TES- 
 TAMENTARY TRUSTEES. 
 
 LECTURE I. 
 
 Classes of Business and Their Contrast. 
 
 So far as Accounting is concerned, business can be divided 
 into two great classes: — 
 
 1. Businesses which belong to proprietors and are man- 
 aged by proprietors or by persons appointed by the proprietors 
 for the proprietors' benefit. 
 
 2. Businesses in which there is inability on. the part of the 
 proprietors, and others are chosen, either by the proprietors 
 themselves or by competent authority as substitutes for the 
 proprietors, to transact the business in the place of the pro- 
 prietors. 
 
 The subject matter with which the proprietors are concerned 
 embraces real and personal property (either one or both), 
 such as is capable of valuation. 
 
 The value is expressible in money. 
 
 Such businesses are organized, as to ownership, into the fol- 
 lowing kinds : 
 
 1. Under a sole proprietor. 
 
 2. Under general partners. 
 
 3. Under special partners, or under both general and 
 special. 
 
 4. Under a joint stock ownership. 
 
 The subject matter of a business under the control of pro- 
 prietors is called their assets, and is expressed in money. 
 
 The obligations under which proprietors are placed and which 
 arise out of the business are called the liabilities. These also 
 are expressed in money. In order to bring out clearly the two 
 great classes of businesses and consequently to contrast them, 
 we will explain the theory on which each of them is founded, 
 as originating in the law. 
 
6 '"''''' Account^' of Executors 
 
 (a) businesses in which the proprietors are persons 
 
 (natural or artificial) who are capable of 
 
 conducting businesses. 
 
 The P ersonalistic Theory. 
 
 According to the personalistic theory, accounts are divided 
 into three great classes, according to the three classes of people- 
 heading the accounts. The first class are^qrxesppndent account^ ; 
 the second, custodian accounts ; and the third, proprietor ac- 
 counts. Correspondents are all those persons who arejuristi- 
 cally liable to the proprietor or to the administrator of the 
 business for an existing debt; they are his true debtors, the 
 payment of whose debts the proprietor or administrator can 
 enforce by law. Correspondents likewise comprehend all those 
 persons who can juristically enforce the payment of the debts 
 which the proprietor owes to them. The latter debts constitute 
 the true liabilities of the proprietor. These juristic accounts, 
 accounts of true debtors and true creditors, comprise not only 
 open accounts with persons, but include all those debits and 
 credits of persons towards the proprietor not indeed headed 
 with the name of persons, but nevertheless debits and credits 
 of persons toward the proprietor supported by documentary 
 evidence, such as bills receivable and bills payable, and mort- 
 gages receivable and mortgages payable, debits aijd credits 
 which have taken the accounts out of the open accounts, and 
 placed them under other categories. It is not our business here 
 to give the subdivision of the only class of accounts which 
 are truly debtors and truly creditors of the proprietor. The 
 creditor]^ are the true and only liabilities of the proprietor, while 
 the debtors represent the only persons who have liabilities 
 toward the proprietor. This term liabilities is used in the 
 strict sense of claims which can be enforced by the law. 
 
 We come now to the second, or custodian, class of accounts. 
 A custodian is one who is trusted with the care of property 
 for another; he is a trustee. He is called by various names, 
 according to the class of property he has in his charge. One who 
 has the custody of cash is called a cashier; one who has the 
 control over cash, a treasurer ; one who has the charge of prop- 
 erty, a st^orekeeper, or some other equally significant name. 
 
AND Testamentary Trustees. 7 
 
 The proprietor may be his own custodian, in which case there 
 are two personalities joined in one. All assets not included 
 under the correspondent class belong to the custodian class. 
 The na^Qie^f custodian heading each account has been gr aduall y 
 dropped ^and only the kind of property over which he is custod- 
 ian remains. Instead of putting Custodian of Merchandise as 
 the heading of an account, we simply say, Merchandise, and in- 
 stead of saying Custodian of Cash or Treasurer, we simply 
 say Cash. 
 
 The word ''debtor" of the correspondent class, meaning one 
 under liability, has been idealogically applied to the custodian 
 class; i. e., the use of jthe ^^^ has been extended to the cus- 
 todian class, with an entirely altered_meaning. It no longer 
 implies a liability, but simply a r esponsib ility or accountability 
 for the goods entrusted to the custodian's charge ; if they dis- 
 appear he must be able to tell why they disappear, and show 
 that it is through no fault of his own. The word ''creditor" is 
 also idealogically transferred to this class of accounts, with the 
 meaning that the custodian is freed from his responsibility. 
 
 In all accounting in which the proprietor or owner is not 
 the central figure, trusteeship prevails, and the ideas of 
 the custodian class of accounts are dominant. The Mer- 
 chandise account is the typical account of this class. The 
 custodian is debited, in the altered sense,, with what he had 
 on hand at the beginning, with what he has received, and 
 with all increase in value, under the name of profit; then he 
 is credited with all he has parted with, and with any decrease 
 in value or loss ; and finally he is credited with what he has 
 on hand at the true accounting. As the trustee has had a 
 limited right of ownership conferred upon him, and as he is 
 also custodian of the fund in his charge, consisting of all 
 his assets in his dual capacity of custodian and trustee, he 
 debits or charges himself with the fund, with all additions 
 thereto, and with all profits ; he credits himself with all trans- 
 fers of property to others, with all losses, and finally with 
 what he has on hand. 
 
 As to the third class of accounts, proprietor accounts, they 
 represent the accounts of the proprietor as capitalist. The 
 capital fund with which they begin is the excess of assets over 
 liabilities or the proprietor's equity in the business. The pro- 
 
8 Accounts of Executors 
 
 prietor in these accounts takes credit, i. e., he holds responsible 
 the administrator who is debited, or held responsible for the 
 fund, of the business, resulting from the correspondent and the 
 custodian accounts. He, the administrator, or the proprietor 
 as administrator, is debited ^with the fund with which the 
 business commences, and the proprietor as capitMist is credited. 
 
 You will observe that this fund is not a liability of the ad- 
 ministrator, buLt merely a responsibility; hence the capital is 
 not ajiability, as is frequently stated. All increase of the capi- 
 tal fund which represents the fortunes of the business, belongs 
 to the proprietor as capitalist. 
 
 From what' we have said may be deduced the following 
 rule: (a) Debit him who receives a value. In the case of a 
 con-espondent he becomes a true debtor ; i. e., he is really liable. 
 In case of a custodian, he becomes idealogically a debtor ; i.e., 
 he is answerable for the goods committed to his charge, (b) 
 Credit him who gives a value. In the case of a correspondent, 
 he becomes a true creditor; i. e., he can hold the proprietor 
 liable. In case of a custodian, he becomes idealogically a 
 creditor ; i. e., his responsibility for the goods he has given out 
 ceases. 
 
 In the case of the proprietpr as capitalist we noticed that he 
 became a debtor for Certain values representing decreases of 
 the capital fund, and creditor for all increase of the capital 
 fund;'the former signifying that for the losses he released the 
 administrator, who took credit for the same ; the latter signify- 
 ing that for gains he put further responsibility on the adminis- 
 trator,, who became responsible to so much the greater extent. 
 Hence collecting together and making one general rule we 
 have : 
 
 Debit him who receives a value or who of a value becomes 
 debtor; and credit him who gives a value or who of a value be- 
 comes creditor. 
 
 We will give two illustrations : 
 
 Bought Merchandise for Cash $500. 
 
 Here the Custodian- of Merchandise is debtor to Proprietor^ 
 creditor, $500. 
 
 Proprietor is debited to Cash, creditor, $500. 
 
 The central figure, the £roprietor, is both debtor and creditor 
 for $^0. The proprietor's account is unnecessary, since it is 
 
AND Testamentary Trustees. 9 
 
 both debtor and creditor for $500. The custodian of merchan- 
 dise remains a debtor for $500. The custodian of cash is a cred- 
 itor, i. e., is relieved of his obHgation to the extent of $500. We 
 usually say Mdse. Dr. to Cash $500. This does not mean what 
 it says, for Merchandise is not debtor to Cash. But it means 
 that as a result of the transaction, there remains an account to be 
 debited $500, and another to be credited the same. Pacioli 
 wrote it: By Mdse. ^ to Cash, signifying that the proprietor 
 was creditor by merchandise and the proprietor was debtor to 
 cash, the two carets showing the omission of the proprietor's 
 name twice. Nearly a hundred years after, Manzoni wrote it : 
 Mdse. II Cash. This is an example of debiting him who re- 
 ceives a value, the custodian of merchandise, and crediting 
 him who gives a value ; viz., the custodian of cash. 
 
 Again: Bought, for the use of the office,'^^tafionery from 
 John Brown, $10. Here the goods bought were for consump- 
 tion in the office, and consequently on their consumption the 
 proprietor as capitalist became poorer, and the proprietor as 
 administrator assumed a liability to John Brown. Debit him 
 who of a value becomes a debtor ; viz., the proprietor as capital- 
 ist, under that branch of his accounts, called Profit and Loss, 
 and credit him who gives a value. Profit and Loss to Pro- 
 prietor as administrator, $10, and Proprietor as administrator 
 debtor to John Brown, $10. 
 
 Since the proprietor as administrator is both debtor and credi- 
 tor $10, this account can be omitted from our books of acqount 
 and it only remains to debit Profit and Loss $10, and credit John 
 Brown $10. 
 
 LECTURE IL 
 
 (b) businesses in which the proprietors are legally in- 
 capable OF conducting their businesses. 
 
 In the place of the proprietor and the custodians of the first 
 class of businesses is substituted the administrator of the busi- 
 ness. 
 
 The administrator takes the generic name of trustee, and 
 according to the duties imposed upon him, various specific 
 names, such as executor, administrator, testamentary trustee, 
 receiver, assignee, guardian, etc. In his powers he is subject 
 
lo Accounts of Executors 
 
 to the source of his appointment, with such other restraints 
 as the law may further impose. 
 
 As substitute for the proprietor, the trustee is the absolute 
 owner of the trust property against the whole world, and is 
 accountable to no one but the beneficiaries of his trust, this 
 latter condition arising from his becoming a custodian for 
 others. For the above reasons the estate under the trustee is 
 called the legal estate, and the estates under the beneficiaries, 
 the equitable estates. The estate of the trustee consists in the 
 ownership of the property itself, and as such owner he can 
 sue and be sued, and perform many functions pertaining to 
 a property owner; while the beneficiary, by reason of his 
 right, in a court of equity can compel the trustee to carry out 
 the provisions of the trust. 
 
 There are three classes of facts affecting a trustee as a 
 person of inherence and as a person of incidence, with respect 
 to jus in personam and jus in rem. 
 
 1. Investive facts, by which he has become invested with 
 certain rights and powers. 
 
 2. Translative facts, by which he becomes invested with 
 certain rights and powers, at the expense of being divested of 
 other rights and powers. 
 
 3. Divestive facts, by which, in consequence of being a 
 person of incidence, he becomes divested of rights aod powers 
 which belong to him as a person of inherence. 
 
 The following arrangement of facts applies to trusteeship in 
 general, wherever applicable ; but it has more immediate refer- 
 ence to the trustee as executor or to the trustee as testamentary 
 trustee, of whose account keeping we shall treat in these 
 lectures : 
 
 (A) The trustee as a person of inherence, with respect to 
 jus in personam and jus in rem. 
 
 I. Investive facts of trusteeship. 
 
 1. Inventory of assets coming into trustee's hands. 
 
 2. Increase from newly discovered assets. 
 
 3. Increase from use of corpus. 
 
 a. From rents. 
 
 b. From interest. 
 
 c. From dividends. 
 
AND Testamentary Trustees. ii 
 
 4. Collection of debts inventoried as bad, desper- 
 
 ate or valueless. 
 
 5. C hoses in action. 
 
 6. Liquidation of partner's interest. 
 
 7. From foreign administration. 
 
 8. From growing crop, the result of cultivation. 
 II. Investive facts, arising from translative facts, such 
 
 as gains from sales. 
 (B) Trustee as a person of incidence, with respect to per- 
 sons in interest, creditors, debts incurred for account of estate. 
 I. Divestive facts of trusteeship. 
 
 1. Losses arising from translative facts. 
 
 2. Debts marked bad or doubtful not collected. 
 
 3. Debts appraised as good which trustee is not 
 
 able to collect, by exercise of ordinary dili- 
 gence. 
 
 4. Funeral charges and testamentary expenses. 
 
 5. Articles of property perished or lost without 
 
 trustee's fault. 
 
 6. Amounts paid creditors. 
 
 7. Actual and necessary expenses paid in manage- 
 
 ment of estate, and execution of trust. 
 
 8. Amounts paid to testamentary legatees and next 
 
 of kin. 
 
 9. Items of property remaining unsold or uncol- 
 
 lected, with appraised value thereof. 
 10. Claims of creditors presented to and allowed 
 by trustee for which a judgment or decree 
 has been rendered against him. 
 On examining the above arrangement, it will be seen that 
 the subject is divided into two grand divisions, the first of 
 which relates to the trustee as a person of inherence. 
 
 (A) With respect to the investive facts, the trustee has a 
 double relation, viz., as custodian and as owner. As custodian 
 he is debited when he becomes invested with the facts, and as 
 owner he becomes a creditor with respect to the same facts. 
 Hence the following rules : — 
 
 I. As custodian of an investive fact, the trustee is debtor 
 to the trustee as owner, the latter being creditor for the same 
 investive fact. 
 
12 Accounts of Executors 
 
 2. When he divests himself of an investive fact, as owner 
 he is debited, because his property is diminished; and as cus- 
 todian he is credited, because he is discharged of responsibiHty. 
 
 Here debtor and creditor signify responsibiHty and discharge 
 from responsibiHty as custodian. 
 
 If now we take the assets of the personal estate of an estate, 
 and present each class of them as under the trustee as custodian, 
 under the name of its category, and the whole under the trustee 
 as owner of these assets collectively, of the personal estate, we 
 have : 
 
 Dr. Asset A. Cr. 
 
 Value (a) 
 
 
 Dr. Asset B. Cr. 
 
 Value (b) 
 
 Dr. Asset C. Cr. 
 
 Value (c) 
 
 
 etc. 
 
 
 Dr. Personal Estate Cr. 
 
 Value (a+b+c+etc.) 
 
 The accounts Asset A, Asset B, Asset C, etc., represent 
 the fact that the trustee is custodian of the goods underlying 
 these assets, and is responsible for their value, and the per- 
 sonal estate account represents the fact that he is owner of the 
 same. As custodian he is said to debit or charge himself with 
 all the investive facts. All the personal assets collectively are 
 called the corpus, or principal, or fund of the estate, and some- 
 times the capital. 
 
 Often, however, it devolves on the trustee to take care of the 
 income, i. e., that which arises from the use of the corpus, or 
 of the real estate, as well as the corpus. In that case, as the 
 income comes in in the shape of cash, he debits himself as 
 custodian in the cash account, and credits an income account 
 with the same, under some appropriate heading, such as In- 
 terest Account, Rent Account, Dividend Account, or perhaps 
 
AND Testamentary Trustees. 15 
 
 Beneficiary Account; and each one of these may be either a 
 particular account, i. e., refer to a single beneficiary, or a 
 collective account, i. e., refer to several beneficiaries, or to 
 several sources of income. 
 
 Besides these income accounts, we sometimes have accounts 
 representing the sale of real estate, when it is to be treated 
 as personal property. In this case also Cash Account is 
 debited, and Sale of Real Estate Account is credited for the 
 selling price. 
 
 (B) We will now consider the trustee as a person of in- 
 cidence. All those accounts so affected as to cause a diminu- 
 tion of the fund of the estate must be credited with the diminu- 
 tion, and the personal estate account debited with the same 
 diminution, for the reason that the estate has not yielded the 
 full amount of the appraised valuation, such as items i, 3, and 
 5 of the divestive facts. 
 
 It will be necessary to debit the personal estate account with 
 such items of the divestive facts as 4, 6, 7 and 8, as they be- 
 come determinate, and to open either particular or collective 
 accounts for the same, which will be credited with the items 
 respectively. 
 
 Examples. Suppose there has been a loss of $100 in the sale 
 of Mdse. The custodian account Mdse. has been debited with 
 the appraised value, then credited with the selling price, and 
 finally is credited with the loss on the sale, $100. The personal 
 estate is debited with the loss, $100. 
 
 Suppose the funeral expenses amount to $280. The Personal 
 Estate Account is debited with this amount, and an account 
 called Funeral Expenses is opened and credited with $280. 
 
 We now have three sets of accounts : — 
 
 1. The custodian accounts, which are specific; i. e., they 
 represent things which can be exchanged or handed over, and 
 with which the trustee is debited. 
 
 2. The personal estate account, which represents the trus- 
 tee, as the legal owner for all values of the corpus which 
 have not been taken out of it to meet the incidences of the 
 estate. 
 
 3. The distributive accounts, which also represent the 
 trustee as the legal owner, but so distributed as to show how 
 the distribution shall take place -among the equitable owners, 
 so far as it has at any time been determined. Distributive ac- 
 
14 Accounts of Executors 
 
 counts are of three kinds, one kind representing income, which 
 arose out of the receipts paid in to the trustee for interest, rents 
 or dividends; the second representing corpus which is taken 
 out of Personal Estate Account, and has to be distributed 
 among its class of distributees; and the third representing 
 money received from the sale of real estate, when it is required 
 to be treated as personalty. 
 
 RELATION. BETWEEN CUSTODIAN AND DISTRIBUTIVE ACCOUNTS. 
 
 The next entries show the connection between the custodian 
 accounts and the distributive accounts, or the divesting the 
 custodian of his custodianship, for which he as custodian takes 
 credit ; i. e., the trustee credits himself as custodian. The cash 
 account may be made up of corpus, income, and sales of real 
 estate. When it includes income or sales of real estate, it is 
 to be credited with all the items chargeable to them, and the 
 proper distributive accounts debited with the same items. 
 
 ACTUAL DISTRIBUTION. 
 
 Debit the proper distributive account, and credit the proper 
 custodian account. When the whole of the personal estate 
 account has been carried to the distributive accounts and the 
 whole of the custodian accounts transferred to the distributive 
 accounts, the custodian accounts, the personal estate account, 
 and the various distributive accounts will have been closed, and 
 the trusteeship ended. 
 
 The above mode of keeping trustee accounts is that of double 
 entry, and the books kept as posting media are the cash book 
 and the journal, or sometimes only a journal; the book in 
 which the accounts are kept is the ledger. 
 
 LECTURE III. 
 
 GENERAL SCHEME OF EXECUTOR^S ACCOUNTS. 
 
 It is not in the power of an executor to make his accounting 
 in what ever way he likes, although there is nothing to pre- 
 vent him from keeping his accounts as he desires. For this 
 reason it is well to keep them by double entry, as given in the 
 last lecture. The method of accounting is not governed by 
 rigid rules, from which there can be no deviation, but it must 
 
AND Testamentary Trustees. 15 
 
 conform to certain regulations. The method may be deduced 
 from the code of civil procedure. 
 
 Effect of Judicial Settlement of Account. Section 2742. A 
 judicial settlement of the account of an executor or adminis- 
 trator, either by the decree of the surrogate's court, or upon 
 an appeal therefrom, is conclusive evidence against all the 
 parties who were duly cited or appeared and all persons deriv- 
 ing title from any of them, of the following facts, and no 
 others : 
 
 1. That the items allowed to the accounting party for 
 money paid to creditors, legatees, and next of kin, for neces- 
 sary expenses and for his services, are correct. 
 
 2. That the accounting party has been charged with all the 
 interest for money received by him and embraced in the 
 account for which he was legally accountable. 
 
 3. That the money charged to the accounting party, as 
 collected, is all that was collectible at the time of the settle- 
 ment on the debts stated in the account. 
 
 4. That the allowances made to the accounting party for 
 decrease, and the charges made against him for increase in 
 the value of property, were correctly made. 
 
 Decree for Payment and Distribution. Section 2743. "Where 
 an account is judicially settled, as prescribed in the code, and 
 any part of the estate remains and is ready to be distributed 
 to the creditors, legatees, next of kin, husband or wife of the 
 decedent, or their assigns, the decree must direct the payment 
 and distribution thereof to the persons so entitled, according 
 to their respective rights. In case of administration in in- 
 testacy, the decree must direct immediate payment and dis- 
 tribution to creditors, next of kin, husband or wife of the 
 decedent, or their assigns, where the administratfeb has peti- 
 tioned voluntarily for judicial settlement of his account as, 
 and in the case provided in subdivision 2, section 2728 of this 
 article. 
 
 "Where notice requiring all persons having claims against 
 the deceased to exhibit the same with the vouchers thereof to 
 the executor or administrator has been duly published ac- 
 cording to law, if one of two or more co-executors, or co- 
 administrators presents his account and a petition for a ju- 
 dicial settlement of his separate account, he must pray that 
 his co-executors or co-administrators may also be cited. Upon 
 
i6 Accounts of Executors 
 
 the presentation of account and a petition, as prescribed in this 
 section, the surrogate must issue a citation accordingly. On 
 the return of a citation issued as prescribed in this section, the 
 surrogate must take the account, and hear the allegations and 
 proofs of the parties respecting the same. Any party may 
 contest the account, with respect to a matter affecting his 
 interest, in the settlement and distribution of the estate. A 
 creditor or a person interested in the estate, although not 
 cited, is entitled to appear on the hearing and thus make him- 
 self a party to the proceeding." 
 
 The effect of a judicial settlement, as given in section 2742, 
 and of the decree for payment and distribution, as given in 
 section 2743, are very general in their character, yet suffi- 
 ciently explicit to be a guide in any particular case. Different 
 estates present different features and details, and whatever 
 these may be, the account must present accurate, full, explicit 
 and definite information and be given in a clear and lucid 
 manner, so that it may be easily understood by all persons 
 interested in it. 
 
 It is to be remarked that the accounting before the surro- 
 gate takes cognizance only of the custodian accounts, and these 
 are all concrete and specific in their character. The acts of a 
 custodian are investive and divestive ; he debits himself with 
 the former and credits himself with the latter, and the facts 
 naturally divide his account into these two parts.. 
 
 But the account proper must be accompanied by schedules, 
 given to classify the facts which enter into the account, and 
 to give all information necessary to render intelligible the 
 condition of the estate. Each jurisdiction may frame its own 
 form for the contents of the schedules, and the presentation of 
 the account, but the various forms will necessarily amount 
 to the same thing. The following is the substance of the form 
 used in the County of New York, State of New York : 
 
 Preliminary : The date of filing of an inventory of the per- 
 sonal property of the deceased, and the amount of it as fixed 
 by the appraisers. 
 Schedule A. 
 
 1. Statement of personal property as contained in inventory 
 which has been sold, with the prices and manner of sale. 
 
 2. Statement of debts due estate as contained in inventory 
 which has been collected. 
 
AND Testamentary Trustees. 17 
 
 3. Statement of all interest of money received by executor 
 for which he is legally responsible. 
 Schedule B. 
 
 1. Statement of debts mentioned in inventory not collected 
 or collectible by executor, and the reason why. 
 
 2. Statement of the articles of personal property mentioned 
 in inventory unsold, and the reason why; and their appraised 
 value. 
 
 3. A statement of all property mentioned therein lost, with- 
 out fault of the executor; the cause of loss and appraised 
 value. 
 
 4. Statement that no other assets than those in inventory 
 or in the schedule set forth, have come to the executor's pos- 
 session or knowledge. 
 
 5. Statement that all the increase or decrease of the values 
 of any assets of deceased is allowed or charged in schedules 
 A and B. 
 
 Schedule C. 
 
 1. Statement of all moneys paid by executor for funeral 
 and all other necessary expenses^ together with the reason and 
 object of such expenditure. 
 
 2. Statement of the date when executor caused a notice for 
 claimants to present their claims against the estate to executor 
 at a certain place specified, to be published in two newspapers 
 for six months, pursuant to order of surrogate, to which order, 
 notice, and due proof of publication herewith filed, the execu- 
 tor refers as part of this account. 
 
 Schedule D. 
 
 1. Statement of all the claims of creditors presented to and 
 allowed by executor or disputed by him, and for which a judg- 
 ment or decree has been rendered against him, together with 
 the names of the claimants, the general nature of the claim, 
 Its amount, and the time of the rendition of the judgment. 
 
 2. Statement of all moneys paid by executor to the creditors 
 of the deceased, and their names ; and the time of such pay- 
 ment. 
 
 Schedule E. 
 
 Statement of all moneys paid to the legatees, widow or 
 next of kin of the deceased. 
 Schedule F. 
 
 Statement of the names of all persons entitled as widow, 
 
1 8 Accounts of Executors 
 
 legatee or next of kin of the deceased, to a share of his estate, 
 with their places of residence, degree of relationship and a state- 
 ment of which of them are minors, and whether they have any 
 general guardian, and if so the name and place of residence 
 to the best of executor's knowledge, information and belief. 
 Schedule G. 
 
 I. Statement of all other facts affecting the administration 
 of said estate, the executor's rights and those of others inter- 
 ested therein. 
 
 In these schedules we have all the materials from which to 
 make the account proper. It runs something as follows : 
 I charge myself: 
 
 With amount of inventory $ 
 
 With amount of increase as per schedule A 
 
 With amount of income as per schedule A 
 
 I credit myself: Total charges 
 
 With amount of losses on sales 
 
 as per schedule B 
 
 With debts not collected as 
 
 per schedule B 
 
 With articles mentioned in 
 
 said inventory unsold, 
 
 schedule B 
 
 With articles mentioned in 
 
 said inventory lost, sched- 
 ule B 
 
 With funeral expenses, and 
 
 other expenses, schedule C 
 
 With money paid to creditors 
 
 as per schedule D 
 
 With money paid to legatees, 
 
 widow, or next of kin, 
 
 schedule E 
 
 Add articles unsold 
 Add debts not collected 
 
 Total to be distributed 
 
AND Testamentary Trustees. 19 
 
 to those entitled tliereto, subject to the deductions of the 
 amount of commissions, and the expenses of this accounting. 
 
 The said schedules, which are severally signed by me, form 
 part of this account. 
 
 All of which is respectfully submitted. 
 New York. 
 
 . . . .day of , 1903. , Executor. 
 
 This is followed by the decree of the surrogate giving the 
 distribution of all the assets not yet distributed. 
 
 LECTURE IV. 
 duties of surrogates and executors. 
 
 The class of trustees which we shall consider is the class 
 called upon to administer the effects of a decedent ; viz., execu- 
 tors, testamentary trustees and administrators. 
 
 An executor is a legal administrator, appointed under the 
 will of the personal estate of a deceased person, who has ac- 
 cepted the administration. The will gives the title to the 
 assets, but it is requisite that letters testamentary be granted 
 to the executors in order to give them such legal possession 
 as the courts will uphold. 
 
 If there is no will or trust deed, then the decedent is said 
 to die intestate, and the person to take the place of the decedent 
 in appointing persons to administer the estate, is called surro- 
 gate, i. e., one subrogated to the rights of the decedent, in ac- 
 cordance with the powers and restrictions conferred on him 
 by law. 
 
 Administration is the legal right to settle and control the 
 estate of deceased persons, and also the exercise of that right. 
 Letters of administration are the warrant, under the seal of 
 the court, giving the legal right. These letters are of three 
 kinds : 
 
 1. Upon the goods, the chattels and credits of a person 
 (assets) who has died intestate. 
 
 2. Special letters of administration,' authorizing the ad- 
 ministrator to collect and preserve the estate, either of a testa- 
 tor in certain cases, or of an intestate (temporary administra- 
 tor). 
 
20 Accounts of Executors 
 
 a. When there is a contest of a will. 
 
 b. Where a person of whose estate the surrogate would 
 have jurisdiction, if he were shown to be dead, disappears or 
 is missing. 
 
 3. Letters of administration authorize the person ap- 
 pointed by the court in place of an executor to exercise the 
 powers given by the will of the deceased, called letters ^of 
 administration with the will annexed. 
 
 The functions of a surrogate are: 
 
 1. To take the proof of wills, to admit wills to probate, to 
 revoke the probate thereof, and to take and to revoke probate 
 of heirship. 
 
 2. To grant and revoke letters testamentary and letters of 
 administration, and to appoint a successor in place of a person 
 whose letter has been revoked. 
 
 3. To direct and control the conduct and settle the accounts 
 of executors, administrators, and testamentary trustees ; to re- 
 move testamentary trustees, and to appoint a successor in 
 place of a testamentary trustee so removed. 
 
 4. To enforce the payment of debts and legacies, the dis- 
 tribution of the estate of decedents, and the payment or de- 
 livery by executors, administrators, and testamentary trustees, 
 of money or other property in their possession, belonging to 
 the estate. 
 
 5. To direct the disposition of real propert}^ and interest 
 in real property of decedents, for the payment of their debts, 
 and funeral expenses, and the disposition of the proceeds 
 thereof. 
 
 6. To administer justice, in all matters relating to the 
 affairs of decedents, according to the provisions of the statutes 
 relating thereto. 
 
 7. To appoint and remove guardians for infants, to com- 
 pel the payment and delivery by them of money or other prop- 
 erty belonging to their wards, and in cases specially pre- 
 scribed by law to direct and control their conduct and settle 
 their accounts. 
 
 Administration in case of intestacy must be granted to the 
 relatives of the deceased entitled to succeed to his personal 
 property who will accept the same, in the following order : 
 
 I. To the surviving husband or wife. 
 
AND Testamentary Trustees. 21 
 
 To the children. 
 
 To the father. 
 
 To the mother. 
 
 To the brothers. 
 
 To the sisters. 
 
 To the grandchildren. 
 
 To any other next of kin, entitled to share in the dis- 
 tribution of the estate. 
 
 9. To an executor or administrator of a sole legatee named 
 in a will whereby the whole estate is devised to such de- 
 ceased sole legatee. 
 
 Letters testamentary and letters of administration relate back 
 to the time of the decedent's death and legalize a payment to 
 one of the administrators before they were granted. Executors 
 may be appointed by implication, and are then called executors 
 according to the tenor. A person may delegate to a person 
 designated in his will the power to name an executor. A per- 
 son named as executor is not bound to accept the office; he 
 may renounce, provided the renunciation is made before he has 
 intermeddled in the affairs of the estate. 
 
 The duties of an executor are the following: 
 
 1. To see that the deceased is properly buried, incurring 
 only such funeral expenses as are necessary and reasonable, 
 having regard to the estate and social standing of the deceased. 
 
 2. To have the will probated, paying such expenses as are 
 necessary. 
 
 3. To prepare an inventory, and have the same duly ap- 
 praised. 
 
 4. To realize, collect, and get in the estate so far as is neces- 
 sary. 
 
 5. To pay the debts of the deceased. 
 
 6. To pay the legacies. 
 
 7. To make any necessary investments. 
 
 8. To distribute the estate. 
 
 9. To keep such accounts as will show how the estate has 
 been administered. 
 
 DEFINITION OF TERMS. 
 
 I. The word "intestate" signifies a person who died with- 
 out leaving a valid will ; but where it is used with respect to 
 
2 2 Accounts of Executors 
 
 particular property, it signifies a person who died without 
 effectually disposing of that property by will, whether he left 
 a will or not. 
 
 2. The word "assets" signifies personal property applicable 
 to the payment of the debts of a decedent. 
 
 3. The words "debts" includes every claim and demand, 
 upon which a judgment for a sum of money or directing the 
 payment of money could be recovered in an action; and the 
 word "creditor" includes every person having such a claim or 
 demand, any person having a claim for expenses of adminis- 
 tration, or any person having a claim for funeral expenses. 
 
 4. The word "will" signifies a last will and testament, and 
 includes all the codicils to a will. 
 
 5. The expression "testamentary trustee" includes every 
 person, except an executor and administrator with the will 
 annexed, or a guardian, who is designated by a will or by any 
 competent authority to execute a trust created by a will ; and it 
 includes such an executor or administrator, where he is acting 
 in the execution of a trust created by the will which is separa- 
 ble from his functions as executor or administrator. 
 
 6. The expression "letters of administration" includes let- 
 ters of temporary administration. 
 
 7. The word "surrogate," where it is used in the text, or in 
 a bond or undertaking given pursuant to any provision of 
 chapter 18, article 3, of the code of civil procedure, includes 
 every officer or any court vested by law with the functions of 
 surrogate. 
 
 8. The expression "judicial settlement", where it is applied 
 to an account, signifies a decree of a surrogate court, whereby 
 the account is made conclusive upon the parties to the special 
 proceeding, either for all purposes, or for certain purposes 
 specified in the statutes ; and an account thus made conclusive 
 is said to be judicially settled. 
 
 9. The expression "intermediate account" denotes an ac- 
 count filed in the surrogate's office, for the purpose of disclos- 
 ing the acts of the person accounting, and the condition of 
 the estate or fund in his hands not made the subject of a 
 judicial settlement. 
 
 10. The expression "upon the return of a citation" where 
 it is used in a provision requiring an act to be done in the 
 
AND Testamentary Trustees. 23 
 
 surrogate's court, relates to the time and place at which the 
 citation is returnable, or to which the hearing is adjourned; 
 includes a supplemental citation, issued to bring in a party who 
 ought to be, but who has not been cited ; and implies that before 
 doing the act specified, due proof must be made that all persons 
 required to be cited have been duly cited. 
 
 11. The expression "person interested", where it is used 
 in connection with the estate or fund, includes every person 
 entitled either absolutely or contingently to share in the estate 
 or the proceeds thereof, or in the fund, as husband, wife, 
 legatee, next of kin, heir, devisee, assignee, grantee, or other- 
 wise, except as a creditor. Where a provision prescribes that 
 a person interested may object to an appointment, or may apply 
 for an inventory, an account, or increased security, an allega- 
 tion of his interest, duly verified, suffices, although his inter- 
 est is disputed; unless he has been excluded by a judgment, 
 decree or other final determination and no appeal therefrom is 
 pending. 
 
 12. The term "next of kin", includes all those, other than 
 a surviving husband or wife, entitled under the provisions of 
 the law relating to the distribution of personal property to 
 share in the unbequeathed residue of the assets of a decedent 
 after the payment of debts and expenses. 
 
 13. The expression "real property" includes every estate, 
 interest and right, legal or equitable, in lands, tenements, or 
 hereditaments, except those which are determined, or distin- 
 guished by the death of a person seized or possessed thereof, or 
 in any manner entitled thereto, and except those which are de- 
 clared by law to be assets. The word "inheritance" signifies 
 real property, as defined in this subdivision, descended as pre- 
 scribed by law. The expression "personal property" signifies 
 every kind of property which survives a decedent other than 
 real property, as defined in this subdivision, and includes a right 
 of action conferred by special statutory provision upon execu- 
 tor or administrator. 
 
 We will now consider in order the executor's duties. 
 
 I. To see that the deceased is properly buried. Anyone 
 performing the Christian services of burying a deceased per- 
 son will be allowed reasonable funeral expenses out of the 
 estate, without reference to the rights of next of kin or credi- 
 
24 Accounts of Executors 
 
 tors, and in preference to their claims. An executor can even 
 before probate dispose of assets to pay funeral expenses. These 
 expenses seem to include expenses incurred for medical attend- 
 ance and others of like kind. 
 
 For the purpose of preserving the property of his testator 
 he may, though he is not bound to do so, take it into his own 
 possession, and for that purpose may peacefully enter into the 
 house of the heir where the effects may be and take them. 
 And when the effects, at the decease of his testator, are in 
 possession of parties not interested in the preservation of them,, 
 there can be no doubt of the duty of an executor to take and 
 properly care for them. 
 
 II. Proof of Will. The application for proof of will may 
 be made by an executor, devisee or legatee named therein or by 
 any person interested in the estate of deceased. The petition 
 for proof should therein show : 
 
 1. The residence of testator and his death: 
 
 (a) That he was an inhabitant of the county of the surrogate ; 
 
 (b) That not being an inhabitant of the state, he died in the 
 county of such surrogate, leaving assets therein ; 
 
 (c) That not being an inhabitant of the state, he died out of 
 the state, leaving assets in the county of such surrogate. 
 
 (d) That not being an inhabitant of the state, he died out of 
 the state, not leaving assets therein, but the assets of such 
 testator have since his death come into the county of such 
 surrogate ; or 
 
 (e) That some real estate devised by testator is situated in 
 the county of such surrogate, and no other surrogate has 
 gained jurisdiction under any of the preceding clauses ; 
 
 2. That he left a last will and testament, with the de- 
 
 scription of it, if not produced with the petition. 
 
 3. That it relates to real or personal property or both. 
 
 4. The heirs at law, or the widow and next of kin of 
 the testator, or that the same cannot, after diligent 
 
 inquiry, be ascertained. 
 
 5. A prayer for the issuing a citation requiring the 
 heirs at law, or the widow and next of kin, or all 
 of them to appear and attend the probate of the 
 will. 
 
 The heirs of a deceased person are those who would sue- 
 
AND Testamentary Trustees. 25 
 
 ceed to real estate under the statute in relation to descent, and 
 are: 
 
 1. His children lawfully begotten, if he have any, and the 
 children of such as shall have died. 
 
 2. His father if he be living. 
 
 3. His mother if she be living, or 
 
 4. His collateral relatives. 
 The next of kin are : 
 
 1. The children and descendants. 
 
 2. The father. 
 
 3. The mother and brothers and sisters, and the legal repre- 
 sentatives of such as shall have died. 
 
 4. His collateral relatives, not beyond brothers' and sisters' 
 children. 
 
 The heirs at law and next of kin of an illegitimate are : 
 
 1. His descendants. 
 
 2. His mother. 
 
 3. His relatives on the part of his mother. 
 
 It is not necessary to enter into the details of proving 
 the will, but only to remark that the expenses of the executor 
 or other person who shall serve the citation, will be allowed as 
 part of the expenses of administration, without regard to credi- 
 tors, as well as the expenses of advertising in the newspapers. 
 If there arises a contention in the proof of the will, delaying 
 the proof, it may be necessary for the surrogate to appoint a 
 temporary or special administration ad colligendum, that is for 
 the purpose of collecting, etc. 
 
 LECTURE V. 
 
 executor's inventory. 
 
 III. To prepare an inventory and have the same duly ap- 
 praised. On application of an executor or administrator, the 
 surrogate by writing must appoint two disinterested appraisers, 
 as often as may be necessary, to appraise the personal property 
 of a deceased person. They shall be entitled to receive a rea- 
 sonable compensation for their services, to be allowed by the 
 surrogate, not exceeding for each the sum of five dollars for 
 
26 Accounts of Executors 
 
 each day actually employed in making appraisement, in addition 
 to expenses actually and necessarily incurred. The number of 
 days' service rendered and the amount of such expenses must 
 be verified by the affidavit of the appraiser, delivered to the 
 executor or administrator, and adjusted by the surrogate before 
 payment of his fees. 
 
 The executors and administrators, within a reasonable time 
 after giving a notice of at least five days to the legatees and 
 next of kin residing in the county where the property is situ- 
 ated, and posting a notice in three of the most public places of 
 the town, specifying the time and place at which the appraise- 
 ment will be made, must make a true and perfect inventory of 
 all the personal property of the testator or intestate, and if in 
 different and distinct places two or more such inventories, as 
 may be necessary. Before making the appraisement, the ap- 
 praisers must take and subscribe an oath to be inserted in the 
 inventory, that they will truly, honestly, and impartially ap- 
 praise the personal property exhibited to them, according to 
 the best of their knowledge and ability. They must, in the 
 presence of such of the parties interested as attend, estimate 
 and appraise the property exhibited to them, and set down 
 each article separately with the value thereof in dollars and 
 cents distinctly in figures opposite to the articles respectively. 
 
 WHAT SHALL BE DEEMED ASSETS. 
 
 The following shall be deemed assets and go to the executors 
 or administrators, to be applied and distributed as part of the 
 personal property of the testator or intestate, and be included 
 in the inventory: 
 
 A. Leases for years, lands held by the deceased from year 
 to year, and estates held by him for the life of another person. 
 
 The first division of assets relates to active leases. They 
 may be called active because they are at the present time bearing 
 fruit ; i. e., yielding rent to the estate of the decedent. They are 
 personal property because the rights under them are less than 
 property in fee or freehold. It is very difficult to tell how 
 the ordinary appraisers put a value on these leases; but the 
 true value of assets of this nature must depend on the net in- 
 come derivable therefrom, according to the best estimate of 
 
AND Testamentary Trustees. 27 
 
 the same, considered in relation to the time the income will 
 last 
 
 They may be converted into cash by sale, or kept intact and 
 turned over to the next of kin at the termination of the execu- 
 torship or testamentary trusteeship, or they may lapse, the term 
 having run out. If the profits from them, either real or esti- 
 mated, exceed the disbursements incurred in consequence of 
 holding them, then they have a value, but if the disbursements 
 exceed the profits from them, then they are an obligation upon 
 the estate. 
 
 Ai. Leases for years. These are leases held by the decedent 
 at the time of his death and are terminable at some certain 
 future date. If we subtract the sum of the annual disburse- 
 ments, certain and estimated, on account of property covered 
 by lease, from the estimated gross annual returns from said 
 property, we obtain the net yearly estimated value of the prop- 
 erty of the estate of the decedent. This estimated net annual 
 value of the lease is an annuity, and the annuity will last for the 
 time of the lease. With money at say 6% per annum (for a 
 high rate covers risks pertaining to lease), the present value 
 of such an annuity will give the value of the lease. The 
 present value may be calculated either by an algebraical for- 
 mula, or obtained from a table of the present value of an an- 
 nuity of $1 per annum, and is then often called the number 
 of years' purchase, for the reason that the net annual annuity 
 multiplied by the number of years will give the present value 
 of the lease. 
 
 We will now give a few examples of the valuation of leases 
 for years : 
 
 Example i. When the lessee has leased the term of his lease 
 at an improved rent. 
 
 The lease has 13 years to run, subject to landlord's rent of 
 $500, average annual taxes $250, average repairs and main- 
 tenance $250. It yields an annual rent of $1,500, money being 
 considered to yield for such property 6% per annum. 
 Estimated annual outlay, $500+$25o-|-$25o=$i,ooo. 
 Estimated net annual return, $1,500 — $i,ooo=:$500. 
 
 By annuity table showing present value of $1 per annum for 
 13 years at 6% per annum, we obtain 8.85 years' purchase, and 
 $500X8.85 =$4,425, present value of lease. 
 
28 Accounts of Executors 
 
 Example 2. Take the same as in last example, but subject 
 to rent charge of $100 per annum for 10 years. 
 At 6% per annum this gives 7.36 years' pur- 
 chase, and $iooX7-36=$736, value of rent 
 charge. 
 Therefore value of lease, $4,425 — $736=$3,689. 
 Example 3. A tenant hires property for $1,000 per annum 
 for 21 years, the tenant to pay taxes and make 
 all repairs. The landlord agrees at the end of 
 the lease to pay for contemplated improve- 
 ments $4,000. The property is rented at an 
 improved rent of $5,000. 
 What is the value of the lease having 10 years yet to run, the 
 average yearly taxes being $800, insurance $240, the repairs, 
 maintenance, cost of collecting rent, and risk of losses on col- 
 lections being estimated at $1,000, with money at 4% for this 
 kind of property ? 
 
 The present value of $1 due in 10 years at 4% is .675564. 
 The present value of improvements, $4,000, is 
 
 $4,oooX.675564=$2,702.256 
 Annual disbursements, $iooo-f$8oo+$iooo+$240=$3040 
 Net rent receivable on lease, $5000 — $3040=1960. 
 Ten years' annuity at 4% gives 8.1 1 years' purchase. 
 Value of lease without improvements, $1960X8.11 
 
 ==$15895.60 
 Value of lease with improvements, $i5895.6o+$2702.26 
 
 =$18597.86 
 A2. Leases from year to year. These leases occur when 
 a tenant has had a lease for a number of years, and does not 
 renew it, but continues in possession on terms like those in 
 the original lease, except as to the term of the lease. They 
 can be terminated at the end of any year. They do not seem 
 to be assignable. In giving their value they can only be esti- 
 mated as a one-year lease. 
 
 A3. Estates held by decedent for the life of another per- 
 son. These are treated in the same way as leases for a term of 
 years except that the number of years' purchase the lease is 
 worth is obtained from a table of net life annuities. For ex- 
 ample, the number of years' purchase of an annuity of $1 for 
 a person aged 74 at 4% is 5.124; of a person aged 15, it is 
 
AND Testamentary Trustees. 29 
 
 19.403 ; of a person aged 44 it is 14.159. The present value 
 of a net income of $1000 of a person aged 44: $1000X14.159 
 =$14159. 
 
 B. The interest in any lease remaining in the estate of 
 the decedent at the time of his death for a term of years after 
 the expiration of any sub-lease granted by him to any other 
 person. 
 
 We will illustrate this condition thus: — A, the decedent, 
 obtained a lease of a piece of property for 21 years; immedi- 
 ately he made a lease of the same to B for a term of 10 years ; 
 5 years of B's lease had elapsed when A died. 
 
 B's lease has now 5 years to run before the property reverts 
 to the estate of A. The estate has an interest in the property, 
 which after 5 years will continue for 11 years. This is called 
 a deferred annuity. 
 
 Suppose the net annual income of this property is $1200. 
 The lease has 16 years to run, the number of years' purchase 
 for 16 years say at 4% is by table 11.65. The lease has 5 years 
 to run before it reverts to A's estate, and the number of years' 
 purchase for 5 years at 4% is 4.45. Therefore the number of 
 years' purchase for the last 11 years is 11.65 — 445=7-20. 
 Value of lease, $i,2ooX7.20=$8640. 
 
 C. The interest in lands devised to an executor for a term 
 of years for the payment of debts. 
 
 This is not a lease for a term of years ; but it is the case of a 
 lessee in possession of a lessor's lease as security for the pay- 
 ment of a debt. The value of this is the debt unpaid, but it is 
 not carried out by the United States Rule for partial pay- 
 ments. Instead, receipts from rents, etc., are applied in reduc- 
 tion of capital until the debt is paid, and then to interest due. 
 (In matter of Tietgen, 5 Dem. 350.) 
 
 D. Things annexed to the freehold or to any building for 
 the purpose of trade or manufacture, and not fixed into the 
 wall of a house so as to be essential to its support. These are 
 called trade fixtures or tenant fixtures. 
 
 E. The crops growing on the land of deceased at the time 
 of his death. 
 
 F. Every kind of produce raised annually by labor and cul- 
 tivation, except grass growing and fruit not gathered. 
 
 (Items E and F separate the produce which is the result of 
 
30 Accounts of Executors 
 
 labor and cultivation from that which is purely due to the 
 efforts of nature.) 
 
 G. Rents reserved to the deceased which had accrued at 
 the time of his death. (Accrued here is interpreted '*in ar- 
 rears".) 
 
 Of course rents in arrears are personal property, being 
 merely debts which had become due but had not been paid. 
 
 H. Debts secured by mortgages, bonds, notes or bills, ac- 
 counts, moneys and bank-bills or other circulating medium, 
 things in action, and stocks in any corporation or joint associa- 
 tion. These are documentary assets. 
 
 I. Goods, wares, merchandise, utensils, furniture, cattle, 
 provisions, moneys unpaid on contracts for sale of land, and 
 every other species of personal property. These are tangible 
 assets. These, I am inclined to think, should be valued on the 
 principle of replacement, modified by wear and tear. 
 
 section 2714 OF CODE OF CIVIL PROCEDURE. 
 
 "The inventory must contain a particular statement of all 
 bonds, mortgages, notes, and other securities for the payment 
 of money belonging to the deceased, known to the executor or 
 administrator; with the name of the debtor in each security, 
 the date, the sum originally payable ; the indorsements thereon, 
 if any, with their dates, and the sum which in the judgment of 
 the appraisers is collectible on each security ; and of all moneys, 
 whether in specie or bank bills, or other circulating medium 
 belonging to the deceased, which have come to the hands of 
 the executor or administrator ; and if none have come into his 
 hands, the fact shall be stated in the inventory. The naming 
 of a person executor in a will does not operate as a discharge 
 or bequest of any just claim which the testator had against 
 him; but it must be included among the credits and effects 
 of the deceased in the inventory, and the executor shall be lia- 
 ble for the same as for so much money in his hands at the 
 time the debt or demand becomes due, and he must apply and 
 distribute the same in the payment of debts and legacies, and 
 among the next of kin, as part of the personal property of the 
 deceased. The discharge or bequest in a will of a debt or de- 
 mand of the testator against an executor named therein, or 
 
AND Testamentary Trustees. 31 
 
 against any other person, is not valid as against the creditors 
 of the deceased, but must be construed as only a specific be- 
 quest of such debts or demand; and the amount thereof must 
 be included in the inventory, and, if necessary, be applied in 
 the payment of his debts ; and if not necessary for that pur- 
 pose, must be paid in the same manner and proportion as 
 other specific legacies. If personal property not mentioned 
 in any inventory come to the possession or knowledge of an 
 executor or administrator, he must cause the same to be ap- 
 praised as herein required, and an inventory thereof to be re- 
 turned within two months after the discovery thereof, and 
 the making of such inventory and return may be enforced 
 in the same manner as in the case of a first inventory." 
 
 Upon the completion of the inventory duplicates must be 
 made and signed by the appraisers, one of which must be re- 
 tained by the executor and the other returned to the surrogate's 
 office within three months of the date of grant of the letters 
 testamentary. 
 
 The inventory is prima facie evidence of the value of the 
 estate. Any increase over the values therein stated belongs 
 to the estate and any decrease must be explained in the ac- 
 counting. 
 
 An executor should supply himself with a true copy of the 
 will when he enters on his duties, and he should carefully 
 follow its directions in the exercise of his duties, looking for 
 advice to his attorney on all points which are not easily under- 
 stood by himself. 
 
 Unless real estate is devised to an executor in trust, the heir 
 or devisee is the only person who has the right to its posses- 
 sion, except where it may be required to pay debts of the 
 decedent, and the executor as such has no control over it; he 
 receives his authority from the will or statute. 
 
 The title to real estate will vest in a testamentary trustee, 
 and he is accountable for the proceeds of such real estate upon 
 a sale, but he should not make such sales without first con- 
 sulting his attorney. 
 
 IV. To Realize, Collect, and Get in the Estate. 
 
 If an executor or administrator discover that the debts 
 against any deceased person and the legacies bequeathed by 
 
32 Accounts of Executors 
 
 him cannot be paid and satisfied without a sale of the per- 
 sonal property of the deceased, the same, so far as may be 
 necessary for the payment of such debts and legacies, must be 
 sold (see section 2717). 
 
 The executor so far is a person of inherence, that is, the 
 property inheres in him, or he is considered the owner who is 
 given the legal right to obtain the possession of it. 
 
 LECTURE VI. 
 
 DISTRIBUTION OF ASSETS AND PRINCIPLES OF BOOKKEEPING. 
 
 Next after gathering together the assets, the executor should 
 distribute the same according to the last will and testament 
 modified by law. However, the will is the chief directing 
 power so long as it is able, according to law, to be the execu- 
 tor's guide. 
 
 In the distribution the executor must fortify himself with 
 the vouchers. On an accounting by an executor or adminis- 
 trator, the accounting party must file a voucher for every pay- 
 ment, excepting in one of the following cases : 
 
 1. For any proper item of expenditure not exceeding $20, 
 if it is supported by his own uncontradicted oath, stating posi- 
 tively the fact of the payment, and when and to whom the pay- 
 ment was made ; but all the items so allowed aggiinst an estate 
 shall not exceed $500. 
 
 2. If he proves by his own oath, or another's testimony, 
 that he did not take a voucher when payment was made; or 
 that the voucher then taken has been lost or destroyed, he 
 may be allowed any item the payment of which is satisfactorily 
 proved by the testimony of the person to whom he made it; 
 or if that person be dead or cannot after diligent search be 
 found, by any competent evidence, other than his own oath, 
 unless the surrogate is satisfied that the charge is correct and 
 just. 
 
 The payments to be made by an executor may be for the 
 following purposes : 
 
 1. Funeral expenses. 
 
 2. Expenses of administration of the corpus of the estate. 
 
 3. Expenses attending income arising out of the estate. 
 
AND Testamentary Trustees. 33 
 
 4. Payments of decedent's debts. 
 
 5. Payments of legacies. 
 
 6. Payment of income to beneficiaries, if within the execu- 
 tor's scope of duties. 
 
 7. Payment to residuary legatees or to next of kin. 
 
 Of course no profit may be made by an executor or admin- 
 istrator, by the increase, nor shall he sustain any loss by the 
 decrease without his fault, of any part of the estate; but he 
 shall account for such increase, and be allowed for such de- 
 crease on the settlement of the account, and the surrogate may 
 allow the accounting party for property of the decedent, per- 
 ished or lost, without the fault of the accounting party. 
 
 The increase to which I have just referred will go to the 
 increase of the assets, principal or corpus of the estate, and the 
 decrease go to the decrease of the assets of the estate, whether 
 the decrease be due to reduction in value on realization, or 
 perishing or loss of assets. Yet the executor is bound to take 
 all reasonable care of the property, and hence such assets as 
 are subject to loss by fire should be insured, and unless it 
 is a producing asset, the premium should be charged to the 
 corpus of the estate; but if a producing asset, to the income 
 which is going to beneficiaries. 
 
 We will now consider the disbursements in their order: 
 
 I. Funeral expenses. So long as these are reasonable, and 
 becoming the condition of the estate of decedent, they will be 
 allowed and are chargeable to corpus of the estate. 
 ^^ 2.^ Exj^nses of administration, except such as are directly 
 ^n^med with income, are chargeable to corpus of estate. 
 
 3. Expenses concerned with income are to be taken out 
 of income. 
 
 4. Payment of decedent's debts. In payment of these two 
 things have to be noticed : — 
 
 A. Ascertainment of debts. 
 
 B. Order of payments. 
 
 I. Ascertainment of debts. The executor or administrator, at 
 any time after the granting of the letters, may insert a notice, 
 once each week for six months, in such newspaper or news- 
 papers printed in the county as the surrogate directs, requiring 
 all persons having claims against the deceased to exhibit the 
 same, with the vouchers therefor, to him at a place to be speci- 
 
34 Accounts of Executors 
 
 fied in the notice, at or before a day therein named, which must 
 be at least six months from the day of the first pubHcation 
 of the notice. The executor or administrator may require satis- 
 factory vouchers in support of any claim presented, and the 
 affidavit of the claimant that the claim is justly due, that no 
 payments have been made thereon and that there are no offsets 
 against the same to the knowledge of the claimant. If a suit 
 be brought on a claim which is not presented to the executor 
 or administrator within six months from the first publication 
 of such notice, the executor or administrator shall not be 
 chargeable for any assets or moneys that he may have paid in 
 satisfaction of any lawful claims or of any legacies, or in mak- 
 ing distribution to the next of kin before such suit was com- 
 menced. 
 
 2. The order of payments : — 
 
 Every executor and administrator must proceed with dili- 
 gence to pay the debts of the deceased, according to the follow- 
 ing order : 
 
 1. Debts entitled to a preference under the laws of the 
 United States. Since the repeal of the inheritance law the only 
 important one is the bond given to pay duties. 
 
 2. Taxes assessed on the property of the deceased during 
 his lifetime; but taxes assessed on real estate subsequent to 
 his death are not to be paid by an executor or administrator 
 as such. It belongs to the testamentary trustee »to pay them. 
 Hence there may arise a question when they are assessed. In 
 New York City, the time seems to be when the books are 
 delivered into the hands of the receiver of taxes for collection. 
 
 3. Judgments docketed and decisions entered against the 
 deceased according to the priority thereof respectively. 
 
 4. All recognizances, bonds, sealed instruments, notes, bills 
 and unliquidated demands and accounts. 
 
 Each class is entitled to payment in full before any pay- 
 ments can be made upon a debt of a subsequent class. 
 
 Preference shall not be given in the payment of a debt over 
 other debts of the same class, except those specified in the third 
 class. A debt due and payable shall not be entitled to a prefer- 
 ence over debts not due; nor shall the commencement of a 
 suit for the recovery of a debt, or the obtaining of a judgment 
 thereon remove the debt from class four (4) to class three (3). 
 
AND Testamentary Trustees. 35 
 
 Debts not due may be paid, according to the class to which they 
 belong, after deducting a rebate of legal interest on sum paid 
 for the unexpired term of credit. An executor or administra- 
 tor shall not satisfy his own debt or claim out of the property 
 of the deceased, until proved to, or allowed by, the surrogate ; 
 and it shall not have the preference over others of the same 
 class. Preference may be given by the surrogate to rents due 
 or accruing on leases held by the testator or intestate at the 
 time of his death over debts of the fourth class, if it appears 
 to his satisfaction that such preference will benefit the estate 
 of the testator or intestate. 
 
 Rents, annuities and dividends shall, on the death, or other 
 sooner determination of the beneficiary therein, be appor- 
 tioned so that he or his executors, administrators or assigns, 
 shall be entitled to a proportion of such rents, annuities, divi- 
 dends, or other payments of like nature, according to the time 
 which shall have elapsed from the commencement or last 
 period of payment thereof, as the case may be, including the 
 day of the death of such person or of the determination of his 
 interest, after making allowance and deductions on account 
 of charges on such rents, annuities, dividends and other pay- 
 ments. Every such person or his executors, administrators 
 or assigns shall have the same remedies at law and in equity 
 for recovering such apportioned parts of such rents, annuities, 
 dividends or other payments, when the entire amount of which 
 such apportioned parts form part, become due and payable, and 
 not before, as he or they would have had for recovering and 
 obtaining such entire rents, annuities, dividends and other pay- 
 ments, if entitled thereto; but the persons liable to pay rents 
 reserved by any lease or demise, or the real property comprised 
 therein, shall not be resorted to for such apportioned part, but 
 the entire rents of which such apportioned parts form parts 
 must be collected and recovered by the person or persons who 
 but for this section would have been entitled to the entire rents ; 
 and such portions shall be recoverable from such person or 
 persons by the parties entitled to the same. 
 
 An assessment confirmed at the time of testator's decease, 
 although a lien upon the real estate, is also a debt to be paid out 
 of the personal estate, but in the fourth class. 
 
 Foreign judgments do not belong to the third class, but to 
 the fourth class. 
 
$6 Accounts of Executors 
 
 Mortgages cannot be paid out of the personal estate, unless 
 so provided by will, in which case they belong to the fourth 
 class. 
 
 Where a creditor has additional security, he should first ex- 
 haust that security and only have recourse to the personal prop- 
 erty for deficiency. 
 
 Creditors of an insolvent partnership, in case of the death 
 of one of the partners, cannot collect their debts against the 
 separate estate of the decedent until his individual liabilities 
 shall have been paid in full. 
 
 A voluntary bond of the testator given in his lifetime, pay- 
 able at or immediately after his death, is a valid debt, and has 
 preference over legacies, but is postponed to debts for valua- 
 ble considerations. 
 
 The executor or administrator will not be protected in pay- 
 ing a debt or claim barred by the statute of limitations, nor will 
 his promise revive such a claim. 
 
 To this point the law is supreme ; after this point the will is 
 efficacious. 
 
 LECTURE VII. 
 
 LEGACIES, AND A SUMMARY OF THE PRINCIPLES OF ACCOUNTING. 
 
 No legacy shall be paid by an executor or administrator un- 
 til after the expiration of one year from the time of granting 
 letters testamentary or of administration, unless directed by 
 the will to be sooner paid. If directed to be sooner paid, the 
 executor or administrator may require a bond, with two suffi- 
 cient securities, on condition that if the debts against deceased 
 duly appear, and there are not other assets sufficient to pay 
 other legacies, then the legatees will refund the legacy so paid 
 or such ratable portion thereof with the other legatees, as may 
 be necessary for the payment of such debts, and the proportion- 
 able parts of such legacies, if there be any, and the costs and 
 charges incurred by reason of the payment to such legatee; 
 and that if the probate of the will under which such legacy is 
 paid be revoked, or the will be declared void, such legatee 
 will refund the whole of such legacy, with interest, to the 
 executor or administrator entitled thereto. 
 
 After the expiration of one year the executors or adminis- 
 
AND Testamentary Trustees. 37 
 
 trators must discharge the specific legacies bequeathed by the 
 will and pay the general legacies if there be assets. If these 
 be not sufficient, then an abatement of the general legacies must 
 be made in equal proportions. Such payment shall be enforced 
 by the surrogate in the same manner as the return of an in- 
 ventory and by a suit on the bond of such executor or admin- 
 istrator, whenever directed by the surrogate. 
 
 A legacy is a gift of personalty by will. It may be : — 
 
 1. A general legacy (pecuniary), one payable out of the 
 general assets of the testator. 
 
 2. A specific legacy, a bequest of a specific part of the per- 
 sonalty. 
 
 3. A demonstrative legacy, partaking of the nature of a 
 specific legacy; when the fund or portion of the estate 
 is designated as the source from which payment is to 
 be made, so far it is specific ; but in not pointing out the 
 specific portion of the fund it is general. 
 
 Another division of legacies is : — 
 
 1. Vested, when the right of the property therein is ac- 
 quired, notwithstanding the deferment of the enjoyment 
 of the same. 
 
 2. Contingent, which depend on the fulfillment of some 
 contingency or survivorship. 
 
 Another division is into absolute and conditional. 
 
 All classes of legacies may lapse by failure of a person to 
 take them, or be adeemed by the destruction of the subject mat- 
 ter in the lifetime of the testator. 
 
 If a legatee predecease the testator, the intended legacy 
 lapses and falls into the residue of the estate ; but if the legatee 
 be a child or other issue of the testator and predecease the 
 testator, leaving issue living at the time of the death of the 
 testator, then such intended legacy shall not lapse, but shall 
 take effect as if the death of such intended legatee had hap- 
 pened immediately after the death of the testator. 
 
 We will now proceed to the accounting, gathered from the 
 law as already given. The will gives the executor or testa- 
 mentary trustee the title to the property, which must be con- 
 firmed by the court. Under this the executor or trustee may 
 act to a limited extent in preserving the property and in dis- 
 tributing the corpus, prior to qualification. 
 
33 Accounts of Executors 
 
 Having qualified, it gives him the ownership so far as con- 
 cerns the power of collecting the assets and suing for them. 
 
 Next an inventory is made of the personal property, with 
 estimated values of it taken by appraisers. Now begins ac- 
 counting. The executor, as trustee, holds the property for the 
 benefit of creditors and those interested in the accounts, with 
 power to repel interference from them. 
 
 Under the category of duties, he debits himself with a 
 classified set of assets, so as to show the whole of the estate 
 in accordance with the inventory, for which he is answerable. 
 The total of the inventory is the estimated value of the estate. 
 Any one of the assets may be increased at the expense of an- 
 other and his relation to those creditors and those interested may 
 not be altered, for the sum total of the assets will remain the 
 same and the interest of no one will be affected. There is a 
 mere shifting of values. Any newly discovered property must 
 be inventoried, and the executor must debit himself with the 
 value of the discovery. If on realization of an asset by sale the 
 value of the estate is increased, he must debit himself with the 
 increase ; for this is considered a profit, and all profits 
 from sales go to the estate. If in the realization the value of 
 the estate is decreased, he must credit himself with the decrease. 
 Total of executor's indebtedness = value of original entry -\- 
 value of additional inventories + increase of values of assets 
 over and above inventoried values. 
 
 An executor may have been indebted to the decedent at the 
 time of the decedent's death ; he cannot hold his indebtedness 
 as an offset to a legacy, or a legacy as an offset to the indebt- 
 edness, for in the event of the amount distributable to the 
 legatees being insufficient to pay them in full, as a debtor to the 
 estate he is held in full, but as a legatee he receives only his 
 scaled legacy, like other legatees. 
 
 It is a general principle in trustees' accounting that the trus- 
 tee can receive no benefit from an estate, except such as is 
 given him under a will or as commission for his services, and 
 that he is supposed to do all work connected with the estate, 
 for which he will receive no pay, but that the surrogate may 
 allow him for services of others, if they are necessary, and 
 grant him extra compensation if his services are extraordinary. 
 This condition puts it out of the power of the trustee to make 
 
AND Testamentary Trustees. 39 
 
 and legally enforce extra compensation. The surrogate, the 
 legal substitute of the deceased, is allowed to decide. The 
 will may override all this. 
 
 The assets with which the executor by virtue of his office 
 has debited himself, must in the nature of things remain assets ; 
 they cannot possibly pass into liabilities. Yet he may enter 
 into another relation by properly disposing of them, in which 
 case he becomes a creditor in the language of the law with 
 respect to them. If he can account for any portion of them 
 passing lawfully out of his hands, he is credited with that 
 portion, and this he may have to do at an intermediate ac- 
 counting, showing what remains, with which he is still debited. 
 
 He will be credited with all administrative expenses, with 
 all losses which have arisen through no fault of his own, with 
 all payments to creditors and legatees, so long as the distribu- 
 tion is according to law, and with a residue if there be. one, 
 making the sum of his credits equal the sum of his debits. 
 
 This equation is the foundation of the system. The sum of 
 the executor's debits equals the sum of his credits ; i. e., what- 
 ever came into his hands has been legally passed out. The 
 bookkeeping as laid down by the law is one of single entry; 
 not the single entry of commercial bookkeeping, which is 
 founded on proprietorship, but of bookkeeping founded on 
 trusteeship. 
 
 LECTURE VIII. 
 
 ORDER OF DISTRIBUTION OF RESIDUE ADVANCEMENTS, 
 
 COMMISSIONS. 
 
 If the deceased died intestate, the surplus of his personal 
 property after payment of debts, and if he left a will, such sur- 
 plus, after the payment of debts and legacies, if not bequeathed, 
 must be distributed to his widow, children or next of kin, in 
 the manner following: 
 
 1. One-third part to the widow, and the residue in equal 
 portions among the children, and such persons as legally repre- 
 sent the children, if any of them have died before the deceased. 
 
 2. If there be no children, nor any legal representatives 
 of them, then one-half of the whole surplus shall be allotted to 
 the widow, and the other half distributed to the next of kin 
 of the deceased entitled thereto. 
 
40 Accounts of Executors 
 
 3. If the deceased leaves a widow, and no descendant, par- 
 ents, brother or sister, nephew or niece, then the widow shall 
 be entitled to the whole surplus; but if there be a brother or 
 sister, nephew or niece, and no descendant or parent, the 
 widow shall be entitled to one-half of the surplus, as above 
 provided, and to the whole of the residue if it does not exceed 
 two thousand dollars ; if the residue exceeds that sum, she 
 shall receive, in addition to the one-half, two thousand dollars ; 
 and the remainder shall be distributed to the brothers and sis- 
 ters and their representatives. 
 
 4. If there be no widow, the whole surplus shall be dis- 
 tributed equally among the children and such as legally repre- 
 sent them. 
 
 5. If there be no widow and no children, and no representa- 
 tive of a child, the whole surplus shall be distributed to the 
 next of kin, in equal degree to the deceased and their legal 
 representatives. 
 
 6. If the deceased leave no children, and no representatives 
 of them, and no father, and leave a widow and a mother, the 
 half not distributed to the widow shall be distributed in equal 
 shares to his mother and brothers and sisters, or the representa- 
 tives of such brothers and sisters; and if there be no widow, 
 the whole surplus shall be distributed in like manner to the 
 mother and to the brothers and sisters, or the representatives 
 of such brothers and sisters. 
 
 7. If the deceased leave a father and no child or descendant, 
 the father shall take one-half, if there be a widow, and the 
 whole, if there be no widow. 
 
 8. If the deceased leave a mother, and no child or de- 
 scendant, father, brother, sister, or representatives of a brother 
 or sister, the mother, if there be a widow, shall take one-half ; 
 and the whole if there be no widow. 
 
 9. If the deceased was illegitimate and leave a mother, and 
 no child, or descendant, or widow, such mother shall take the 
 whole, and shall be entitled to letters of administration in ex- 
 clusion of all other persons. If the mother of such deceased 
 be dead, the relatives of the deceased on the part of the mother 
 shall take in the same manner as if the deceased had been 
 legitimate, and be entitled to letters of administration in the 
 same order. 
 
AND Testamentary Trustees. 41 
 
 10. Where the descendants or next of kin of the deceased, 
 entitled to share in his estate, are all in equal degree to the 
 deceased, their shares shall be equal. 
 
 11. When such descendants or next of kin are of unequal 
 degrees of kindred, the surplus shall be apportioned among 
 those entitled thereto according to their respective stocks, so 
 that those who take in their own right shall receive equal 
 shares, and those who take by representation shall receive the 
 share to which the parent whom they represent would have 
 been entitled if living. 
 
 12. Representation shall be admitted among collaterals in 
 the same manner as allowed by law in reference to real estate. 
 
 13. Relatives of the half blood shall take equally with 
 those of the whole blood in the same degree; and the repre- 
 sentatives of such relatives shall take in like manner as the 
 representatives of the whole blood. 
 
 14. Descendants and next of kin of the deceased, begotten 
 before his death but born thereafter, shall take in the same 
 manner as if they had been born in the lifetime of the deceased 
 and had survived him. 
 
 15. If a woman die leaving illegitimate children, and no 
 lawful issue, such children inherit her personal property as if 
 legitimate. 
 
 On examining the above rules for distribution of residue of 
 the personal property of an estate, we find: 
 
 1. That the widow, who is not a relative by blood, has yet 
 in all cases special allowances made to her. 
 
 2. That taking the deceased as the central figure, and trac- 
 ing the stock (stirpes) downward, he may have children ; that 
 each of them who is alive will have an equal share after pro- 
 viding for the widow ; and the children of those who are dead 
 will equally receive the share of the parent. This is called per 
 stirpes, and not per capita. 
 
 3. That there being no downward stock, we proceed up- 
 ward to the father, who will take the whole, except what the 
 law gives to the widow. 
 
 4. If the downward stock of the deceased entirely fail, and 
 the father is likewise dead, then the children of the father, 
 or brothers and sisters of the decedent who are alive, take 
 equal shares, and the nephews and nieces of the decedent take 
 
42 Accounts of Executors 
 
 the shares of their parents who are dead, share and share alike ; 
 i. e., per stirpes ; but also that the widow is first provided for, 
 and that the mother receives a share as though she were a 
 sister. 
 
 EXAMPLES. 
 
 1. The residue of a man's personal property is $21,000; 
 there are surviving him a widow, three children, and two 
 grandchildren, whose parent is dead. What portion of the 
 S2i,ooo will each of the survivors receive? 
 
 Answer — Widow $7,000, each of surviving children $3,500, 
 and each of the grandchildren $1,750. 
 
 2. Show the double entry bookkeeping necessary to carry 
 out the conditions of Question No. i. 
 
 3. The residue of a man's personal property is $21,000. He 
 died, leaving no children, grandchildren, or father, but he 
 left a widow, a mother, a brother and sister alive, and two sons 
 of a sister who predeceased him. How is the property to be dis- 
 tributed ? 
 
 Answer — Widow $10,500, mother, brother and sister each 
 $2,625, 3.nd each nephew $1,312.50. 
 
 ADVANCEMENTS. 
 
 If any child of a deceased person has been acivanced by the 
 deceased, by settlement or portion of real or personal property, 
 the value thereof shall be reckoned with that part of the sur- 
 plus of the personal property which remains to be distributed 
 among the children; and if such advancement be equal or 
 superior to the amount which according to the preceding sec- 
 tion would be distributed to such child as his share of such 
 surplus and advancement, such child and his descendants shall 
 be excluded from any share in the distribution of such surplus. 
 If such advancement be not equal to such amount, such child 
 or his descendants shall be entitled to receive so much only 
 as is sufficient to make all the shares of all the children in such 
 surplus and advancement to be equal, as near as can be esti- 
 mated. The maintaining or educating, or the giving of money 
 to a child, without a view to a portion or settlement in life, 
 shall not be deemed an advancement, nor shall the foregoing 
 
AND Testamentary Trustees. 43 
 
 provisions of this section apply in any case where there is any 
 real property of the intestate to descend to his heirs. Where 
 there is a surplus of personal property to be distributed and 
 the advancement consisted of personal property, or where a 
 deficiency in the adjustment of an advancement of real prop- 
 erty is chargeable on personal property, the decree for distribu- 
 tion, in the surrogate's court, must adjust all the advancements 
 which have not been previously adjusted by the judgment of 
 a court of competent jurisdiction. For that purpose, if any 
 person to be affected by the decree is not a party to the pro- 
 ceeding, the surrogate must cause him to be brought in by a 
 supplementary decree. 
 
 examples. 
 
 1. A person dies leaving a widow and three children to 
 share in the residue of his personal property, valued at $21,000. 
 He has advanced during his lifetime to his eldest son $3,000, to 
 establish him in business. What are the distributed shares of 
 each? Widow $8,000, the eldest $2,333.34, and each of the 
 other two $5,333'33- 
 
 2. Suppose the advancement to the eldest has been $9,000, 
 what would each then receive ? Widow $7,000, eldest nothing, 
 the other two each $7,000. 
 
 COMMISSIONS. 
 
 Executors, administrators and testamentary trustees are en- 
 titled to commissions as given below, and it is obligatory on 
 the surrogate to allow them. They should be apportioned 
 among the executors, among the administrators, and among 
 the testamentary trustees according to the services rendered 
 by them respectively, over and above their necessary and rea- 
 sonable expenses, as follows : 
 
 For receiving and paying out all sums of money not exceed- 
 ing $1,000, at the rate of 5%. 
 
 For receiving and paying out any additional sums not 
 amounting to more than $10,000, at the rate of 2^'2%. 
 
 For all sums above $10,000, at the rate of 1%. 
 
 If the value of the personal property amounts to $100,000 
 or more over all debts, each executor or administrator is en- 
 
44 Accounts of Executors 
 
 titled to the full compensation on principal and income allowed 
 herein to a sole executor, administrator or testamentary trus- 
 tee, unless there are more than three, in which case the com- 
 pensation to which three would be entitled must be appor- 
 tioned among them according to the services rendered by them 
 respectively, and a like apportionment shall be made in all 
 cases where there shall be more than one executor, administra- 
 tor or testamentary trustee. Where the will provides a specific 
 compensation to an executor or administrator, he is not entitled 
 to any allowance for his services, unless by a written instru- 
 ment filed with the surrogate he renounces the specific com- 
 pensation. If a person serves under different capacities he is 
 entitled to compensation in one capacity only, at his election. 
 
 Trustees are not required to surrender the fund on which 
 commissions are chargeable, until the latter are paid. 
 
 Commissions must be applied in liquidation of a debt of a 
 trustee to the estate, and in liquidation of claims against the 
 trustee for losses resulting from negligence. 
 
 Trustees are entitled to commissions for receiving and pay- 
 ing out all moneys constituting the corpus of the estate, and 
 any additions thereto from increase of any kind. Commissions 
 can never be computed on sums exceeding the gross amount 
 of the estate and its actual income; and the moneys paid out 
 upon which commissions may be computed are the moneys paid 
 out for debts and expenses of administration a!nd to legatees 
 or other beneficiaries which appear to diminish the estate as 
 it exists in the hands of the trustees and to pass out of and 
 away from the estate. 
 
 In any given trust, the commissions are computed on the 
 amount received or paid out by all the trustees, and not on 
 the sums received and paid out by each. Commissions are to 
 be computed as of date of settling, not of date of filing the 
 account, and according to the law then in force. 
 
 Commissions are allowed on annual income when the trustee 
 is required to keep funds invested, to receive and pay out the 
 income annually, if he does receive it, to render an account 
 thereof to the beneficiary, and to pay over the net balance; 
 similarly when he renders annual accounts to the court or 
 when he is required or permitted to state his accounts with 
 annual rests. In all these cases the commission is computed at 
 
AND Testamentary Trustees. 45 
 
 the full rate. Computations cannot be allowed more frequently 
 than annually. It is against the trustee's interest to allow the 
 income to accumulate beyond a year, as in that case his com- 
 missions might be lessened. 
 
 No commission is allowed on specific legacies. An annuity, 
 which is a series of legacies, like a legacy is not chargeable 
 with commissions, but where a beneficiary receives the use of 
 a fund, the beneficiary is to be charged with commission. In 
 all these cases, commissions on income are computed on each 
 occasion at the full rate; viz., on the first thousand dollars, 
 2>^% for receipts and 2^% for payments, etc. The total 
 amount of income for the year must be taken as the basis. 
 
 EXAMPLES. 
 
 1. Two trustees collect income for one year for the use of a 
 beneficiary, amounting to $20,000; the expense attending the 
 same amounts to $2,000. With what sum shall the beneficiary 
 be charged for commission, and how much for equal services 
 should each trustee receive on the annual accounting, also how 
 much will be due the beneficiary? 
 
 Total commission $390, each trustee's commission $195, and 
 amount due beneficiary $18,610. 
 
 2. Four trustees receive and pay out of the corpus of an 
 estate $200,000; the debts amount to $50,000. Supposing 
 that their services are equal, what should each trustee receive 
 for commission? Answer — $1,567.50. 
 
 3. Executor A receives of corpus of an estate $20,000, and 
 Executor B receives $30,000; they pay out together $40,000. 
 What will be the amount going to the residuary legatees ? What 
 will be the commission of each executor, their services being 
 reckoned in proportion to the amount each executor received? 
 A's commission $276, B's $414. Residuary legatees would re- 
 ceive $9,310. 
 
 LECTURE IX. 
 
 investments and realization of property. 
 
 The trustee should at all times keep the trust fund fully in- 
 invested, and if he neglects to invest within a reasonable time 
 
46 Accounts of Executors 
 
 he may personally be charged with interest for the unreasona- 
 ble time. He is accountable for all interest actually received 
 arising out of the trust fund, and for all which he might have 
 obtained by due diligence and exercise of ordinary ability. 
 
 The property being once well invested, the investments 
 should not be changed without good reason; e. g., if the in- 
 vestment has become insecure the estate might suffer loss ; or 
 if it has become unproductive, the beneficiary may be suffering 
 in income. The trustee should not traffic in trust securities, as 
 he thereby endangers the fund, yet if a security has acquired 
 a speculative value much above its par as an investment, the 
 investment should be changed so that the life beneficiary may 
 receive the increase of income to which he is entitled. The two 
 objects which the trustee should have in view are: first, se- 
 curity, to protect the interest of the remainderman; and pro- 
 ductiveness, so that the life beneficiary may receive the cur- 
 rent rate of interest. 
 
 A testator sometimes provides that his business shall be 
 carried on after his death for a certain time. In such a case it 
 is the trustee's duty so to do, but if the matter is permissive, he 
 should not continue it against his own judgment. 
 
 A partnership cannot be continued after a change in the 
 firm, nor should the capital be increased. A trustee should 
 never be tempted to hazard the safety of the fund so as to 
 make unusually large returns. 
 
 The following may be pointed out as unfit investments: 
 Loans on merely personal security, investments on unincor- 
 porated business ventures, partnerships, patents, second mort- 
 gages, and mortgages on leasehold property, unproductive 
 real estate and all investments of an untried or speculative na- 
 ture. 
 
 INVESTMENT OF TRUST FUNDS IN STATE OF NEW YORK. 
 
 Section 9, Chapter 295. Laws of 1902. "An executor, ad- 
 ministrator, guardian, trustee or other person holding trust 
 funds for investment may invest the same in the same kind of 
 securities as those in which savings banks of this state are by 
 law authorized to invest the money deposited therein and the 
 income derived therefrom; and in bonds and mortgages on 
 
AND Testamentary Trustees. 47 
 
 unincumbered real property in this state worth fifty per cent, 
 more than the amount loaned thereon." 
 
 Sec. 116. Banking Law of 1902. ''In the stocks or bonds 
 01 interest bearing obligations of the United States, or those 
 for which the United States are pledged to provide for the 
 payment of the interest and principal, including the bonds of 
 the District of Columbia. 
 
 "In the stocks or bonds or interest bearing obligations of 
 this state, issued pursuant to the authority of any law of the 
 state." 
 
 "In the stocks or bonds or interest bearing obligations of 
 any state of the United States which has not within ten years 
 previous to making such investment by such corporation de- 
 faulted in the payment of any part of either principal or inter- 
 est of any debt authorized by the legislature of any such state 
 to be contracted ; and in the bonds or interest bearing obliga- 
 tions of any state of the United States, issued in pursuance of 
 the authority of the legislature of such state, which have prior 
 to the passage of this act been issued for the funding or settle- 
 ment of any previous obligation of such state theretobefore in 
 default and on which said funding or settlement obligation there 
 has been no default in the payment of either principal or inter- 
 est, since the issuance of such funded or settlement obligation, 
 and provided the interest on such funded or settlement obliga- 
 tion has been paid regularly for a period not less than ten years 
 next preceding such investments. 
 
 "In the stocks or bonds of any city, county, town or village, 
 school district bonds, and union free school district bonds 
 issued for school purposes, or in the interest-bearing obliga- 
 tions of any city or county of this state, issued pursuant to 
 the authority of any law of the state for the payment of which 
 the faith and credit of the municipality issuing them are 
 pledged. 
 
 "In the stocks and bonds of the following cities: Boston, 
 Worcester, Cambridge, Lowell, Fall River, Springfield, and 
 Holyoke, in the State of Massachusetts ; St. Louis, in the State 
 of Missouri ; Cleveland, Cincinnati and Toledo, in the State 
 of Ohio ; Detroit and Grand Rapids, in the State of Michigan ; 
 Providence, in the State of Rhode Island; New Haven and 
 Hartford, in the State of Connecticut ; Portland, in the State of 
 
48 Accounts of Executors 
 
 Maine; Philadelphia, Pittsburg, Allegheny, Reading and 
 Scranton, in the State of Pennsylvania; Minneapolis and St. 
 Paul, in the State of Minnesota; Des Moines, in the State of 
 Iowa ; Milwaukee, in the State of Wisconsin ; Louisville, in the 
 State of Kentucky; Paterson, Trenton, Newark and Camden, 
 in the State of New Jersey; Baltimore, in the State of Mary- 
 land; Los Angeles, in the State of California. If at any time 
 the indebtedness of any of said cities, less its w^ater debt and 
 sinking fund, shall receive seven per centum of its valuation 
 for the purposes of taxation, its bonds and stocks shall there- 
 after, and until such indebtedness shall be reduced to seven per 
 centum of the valuation for the purposes of taxation, cease to 
 be an authorized investment for the money of savings banks." 
 Also in the securities of certain railroads, for which see 
 Banking Law as amended by the legislature, 1902. 
 
 REALIZATION OF PROPERTY. 
 
 Certain property may not come into the hands of the trus- 
 tee immediately on the assumption of the trust, so that the life 
 beneficiary will be deprived of any benefit from it. When this 
 fund is realized it must be so apportioned that the life benefi- 
 ciary will receive income from it at the usual rate of interest 
 from the beginning of the trust and the balance of the fund 
 will go to the corpus. The interest on the portion going to 
 the corpus, from the beginning of the trust to the realization, 
 at the usual rate added to the corpus will give the amount 
 realized. The interest should be compounded from year to 
 year. 
 
 EXAMPLE. 
 
 A sum of money, the payment of which is deferred two 
 years after the beginning of the trust, is then received, amount- 
 ing to $10,000 with interest at the rate of 6% per annum. How 
 will the fund be apportioned between corpus and income? So- 
 lution: One dollar at compound interest in two years will 
 amount to $1.1236 and $10,000 divided by $1.1236 gives $8,- 
 899.96 for the corpus and $1,100.04 for income. 
 
 If the sum of money was entered in the inventory at $8,- 
 899.96, then on receipt of the amount cash would be debited 
 
AND Testamentary Trustees. 49 
 
 $10,000, and the inventory value would be credited $8,899.96 
 and the income credited $1,100.04. If the inventoried value 
 should be $9,000, then there would be a loss of $100.04 
 with which personal estate account is debited and the realized 
 account credited. 
 
 Illustrations. A legacy receivable not immediately received. 
 A sum not received in full. An unsuitable investment sold and 
 converted into a suitable one. 
 
 Unproductive property. Converted by sale into productive. 
 Property converted because the earnings are greatly in excess 
 of usual interest as in case of business or partnership or on 
 wasting investments. 
 
 CORPUS AND INCOME DISTINGUISHED. 
 
 The instrument creating the trust decides conclusively what 
 shall go to the life tenant and what to the remainderman. It 
 is simply a question as to the intention of the creator of the 
 trust. If the trust instrument is silent as to the apportioning 
 of corpus and income, the general rules prevail. 
 
 1. If a mortgage held in trust is foreclosed and the land is 
 bought in by one of the trustees, and later sold at an advance, 
 the proceeds, over and above interest on the debt, go to capital 
 (5 Dem. 73). 
 
 2. If trust property is destroyed by fire, the insurance 
 money belongs to the corpus (4 Dem. 404), unless the benefi- 
 ciary has paid the insurance premium. 
 
 3. A bond which forms part of the property settled on the 
 trustee should be inventoried at par, and if sold the profit on 
 the sale goes to the corpus, but the beneficiary receives the 
 whole of the coupon interest, and as interest is reckoned from 
 day to day, pro rata of the interest uncollected to the date of sale 
 (103 N. Y. 445). 
 
 If, however, the bonds are purchased at a premium by the 
 trustee, then the nominal interest is apportioned between in- 
 terest and principal, the former going to the income and the 
 latter forming a sinking fund to meet the premium of the bond 
 when the bond matures. In this latter case the rate per cent, 
 the bond is yielding is found from a bond table, such as Price's, 
 etc. 
 
5© Accounts of Executors 
 
 EXAMPLE. 
 
 A bond per $ioo, nominal rate 4%, has 2 years to run, is 
 bought for $101.93, yielding the trustee 3% interest, payable 
 semi-annually. Show the steps in the account keeping. 
 
 Debit the bond account and credit the cash account at 
 purchase $101.93. Half yearly interest at 3% on $101.93 
 is $1.53, which taken from coupon $2 gives $.47 for sink- 
 ing fund. 
 
 Now debit cash $2 for coupon received and credit in- 
 come $1.53 for interest, and credit the bond account with 
 $.47, the amount required to sink premium, leaving the 
 value of the bond $101.93 — $.47=$ioi.46. Next the half 
 yearly interest at 3% per annum on $101.46 is $1.52, 
 which taken from the coupon $2 gives $.48 for the sinking 
 fund. Debit cash $2 for coupon received and credit in- 
 come $1.52 for interest, and the bond account $.48 for the 
 sinking fund. 
 Proceed in this way to the end of the 2 years, and the re- 
 sult will be exactly $100. Now debit cash $100 for the redemp- 
 tion of the bond and credit the bond account with the same. 
 It will be noticed that the premium has been returned into 
 the cash ready for reinvestment, as also the interest ready for 
 distribution to the beneficiaries. 
 
 4. Dividends. The general rule is that dividends belong 
 to him who holds the stock when the dividend is declared and 
 allotted, irrespective of when the earnings accrued or when 
 the dividend is payable. Consequently a dividend earned be- 
 fore a testator's death, but declared and paid after, goes to 
 income. This rule applies as between a life beneficiary and 
 a remainderman, but interest accruing de die in diem is ap- 
 portionable, e. g., in the case of interest on a mortagage. The 
 courts have held that the same rule applies, whether the divi- 
 dend is paid in cash, scrip or stock. 
 
 If there is a mere pro rata distribution of treasury stock to 
 the stockholders, not representing profits, it belongs to the 
 corpus and not to the income. Its issue decreases to that ex- 
 tent the value of the original shares, giving to the stockholders 
 a larger number of shares, but no larger fund, and the total 
 issue represents capital only. 
 
AND Testamentary Trustees. 51 
 
 Privileges or option given to stockholders to subscribe for 
 stock and bonds, which option has a value of its own, is held 
 by the trustees as capital, not income. 
 
 If a corporation is consolidated with another, and for the 
 purpose of equalizing the interest of shareholders of the stock 
 in question, there is during the life tenancy an extra issue 
 to them of stock or of bonds of the consolidated company, this 
 surplus issue merely follows the interest which it is issued to 
 equalize. 
 
 In allotting stock dividends to life tenants, only such portion 
 should be distributed as represents earnings ; e. g., if stock has 
 been bought at a premium, and an extraordinary dividend has 
 been declared, it must be ascertained whether the selling price 
 of the stock remains as high as that at which it was bought, and 
 if it has fallen the difference must be taken from the extra- 
 ordinary dividend, and accounted as corpus, and the balance of 
 the dividend will be income. 
 
 Contracts of trust. Contracts entered into by decedent prior 
 to his death must be carried out by trustees, and any profits re- 
 sulting therefrom will belong to the corpus and not to income. 
 
 Receiving payment on account. It is held in the matter of 
 Tietgen (5 Dem. 350) that payments paid on account of a debt, 
 though not exceeding the accrued interest, must be considered 
 as capital, not income. Should the entire debt be paid, with in- 
 terest, the interest would constitute income. 
 
 LECTURE X. 
 general remarks on offsets to income and to corpus; 
 
 ALSO ON apportionment AND ADJUSTMENTS OF EX- 
 PENDITURES BETWEEN CORPUS AND INCOME. 
 
 1. The intent of the trust instrument must be followed in 
 making deductions from (i. e., charges against) income. 
 
 2. The creator of the trust may order corpus as well as in- 
 come to be paid to the beneficiary. 
 
 3. He may direct income to be paid subject to charges 
 which ordinarily belong to corpus. 
 
 4. The income may be granted subject to an annuity of a 
 certain amount. 
 
52 Accounts of Executors 
 
 5. He may order the gross income to be paid to the benefi- 
 ciary. 
 
 But where not in opposition to the trust, the following are 
 the principal rules in relation to the above offsets, apportion^ 
 ment and adjustments: 
 
 1. Taxes and assessments which have become a debt of the 
 testator prior to his decease are payable by the executor out of 
 corpus. 
 
 2. Expenses incurred in the borrowing of money to invest 
 in government bonds, so as to avoid the tax otherwise payable 
 out of income, are chargeable against income. 
 
 3. Trustees' commissions on rent and income come out 
 of income. 
 
 4. Trustees' commissions for receiving and paying out cor- 
 pus come out of corpus. 
 
 5. Fees for legal expenses in litigation resulting in a trus- 
 tee's appointment in place of a predecessor removed come out 
 of corpus. 
 
 6. Ordinary repairs must be charged against income, other- 
 wise the corpus will be depleted for the benefit of income. 
 
 7. Interest on incumbrances, e. g., on mortgages, must be 
 borne by the beneficiary, i. e., taken out of income. 
 
 8. The sundry expenses in conducting a business, such as 
 wages, rent, loss from bad debts, and depreciation of plant, 
 come out of income. 
 
 In apportionment and adjustment the following cases re- 
 quire to he considered: 
 
 1. Expenditures required to be made on property received 
 by trustee in an unfructiferous condition, in order to preserve 
 it from decay, constitute a mere shifting of the fund. 
 
 2. Where the trustee under the trust is authorized to invest 
 and reinvest in real estate, he may make improvements on the 
 theory that such expenditure constitutes an investment. This 
 also is a mere shifting of the fund. 
 
 3. Where the expenditure is essential to preserve the estates 
 from destruction, and results in a benefit both to the beneficiary 
 and the remainderman. 
 
 4. Where the expenditure is required to make the estates 
 
AND Testamentary Trustees. 53 
 
 produce revenue, or a substantial revenue, and also to en- 
 hance the value of property, there is a mere shifting of the 
 fund. 
 
 5. Where there are wasting values, it is necessary to charge 
 the income with a sinking fund in order to preserve the corpus. 
 
 6. Compulsory outlays, such as municipal assessments for 
 flagging sidewalks, widening streets, repairs or reconstruction 
 ordered by building department, must be so charged as to affect 
 equitably the beneficiary and the remainderman, and this may 
 or may not be by apportionment of the outlay, according to 
 the requirements of the case. 
 
 EXAMPLES. 
 
 1. Peck vs. Sherwood, 56 N. Y., 615. Here the life interest 
 in land is vested in one person, and the remainder vested in 
 another, and there is no fund in which the two have an interest 
 in common, but there is an available fund in the hands of the 
 trustee in which the life tenant has no interest. The trustee of 
 the remainderman was authorized by the court to unite with 
 the life tenant in an outlay to protect the property in which the 
 remainderman and the life tenant have interests in common. 
 The capital was charged one portion exclusively out of the 
 available fund, in which the life tenant had no interest; leav- 
 ing the other portion exclusively as a liability against the life 
 tenant. The interest of the life tenant in the real estate is 
 found by Northampton tables, and this taken from the total 
 value of the real estate affected gives the interest of the re- 
 mainderman. 
 
 The apportionment of the outlay must be in proportion to 
 these respective interests, hence as the total value of the 
 real estate is to life tenant's interest, so is the total outlay to 
 life tenant's share of outlay. 
 
 2. Stevens vs. Melcher, 80 Hun. 514 (522-525) is a more 
 common case. Here the trustee held in trust both real and 
 personal property, in which the remainderman and the life 
 tenant had interests in common. For an outlay on the real 
 estate, the adjustment of interests was made by charging the 
 whole of the outlay against capital, i. e., the whole was taken 
 out of capital (corpus), thus bringing about an automatic ad- 
 
54 Accounts of Executors 
 
 justment by the remainderman losing the amount of the out- 
 lay and the life tenant the income from the portion lost. 
 
 The same applies in Whittemore vs. Beekman, 2 Dem. 275 
 (283), where a loss is sustained in an authorized investment; 
 also in another branch of the Stevens vs. Melcher case (80 
 Hun., 525 seq.), where the outlay has effected a cor- 
 responding increase in the value of the improved real estate; 
 a charge of the outlay to the extent of the entire permanent 
 increase may be taken out of capital, as by this means there is 
 a mere shifting of investment from personalty to realty, while 
 any balance over and above permanent increase may be charged 
 directly to income. 
 
 3. In Cogswell vs. Cogswell, 2 Edw. Ch. 231 (240-242), 
 certain buildings in Cedar Street are left in trust with re- 
 mainder. The city in widening the street cut off ten feet in 
 front. The court directed that the cost of erecting warehouses 
 on the lots be paid from the available capital ; that out of the 
 rents 6% of the cost of the buildings be reserved, together with 
 a reasonable allowance for depreciation of the buildings until 
 the life estates fall. In this case the life tenants receive the 
 net receipts and profits of this portion of the estate, and in the 
 meantime the money expended is a good and safe investment, 
 drawing 6% during the life estate. 
 
 In the case of only one life tenant the expectation-of-life 
 table will give the average of life for the life tenarit. Then the 
 difference between the estimated value of the buildings at the 
 end of the average life and the present value will give the total 
 depreciation, which, divided by the average life, will give the 
 depreciation to be written off yearly from the income as a sink- 
 ing fund to the cost. 
 
 4. In Swain vs. Ferine, 5 Johns Ch. 482 (491 seq.), a 
 wddow filed a bill for assignment of dower and mesne profits ; 
 the heirs had been obliged to pay off a mortgage to which 
 the dower interest was subject. The decree gave the widow 
 one-third and mesne profits, less her ratable contribution 
 toward the redemption of the mortgage. The court held that 
 in view of her getting her third from the mortgage she ought 
 to pay interest on one-third of the mortgage debt paid by the 
 heirs, but as this method would be inconvenient and embarrass- 
 ing, the direction was that the value of such annual payment 
 
AND Testamentary Trustees. 55 
 
 for her life should be computed and subtracted from the mesne 
 profits*, any excess to be subtracted from the dower assigned. 
 
 5. Stillwell vs. Doughty, 2 Bradf. 311. Where there was 
 no trust a sewer assessment was wholly charged on the re- 
 mainderman, and the life tenant was directed to pay interest 
 on the assessment. 
 
 When property does not immediately pass into the hands of 
 the trustee at the beginning of the trust, such a sum of money, 
 called the present worth, must be found as at the current 
 rate of interest for the time between the beginning of the trust 
 and the time it passes into the trustee's hands will amount to 
 the value passing into his hands. This present worth is cor- 
 pus, and the difference between it and the amount passing into 
 his hands is income. 
 
 • EXAMPLES. 
 
 1. The amount of legacy not immediately received. 
 
 2. Where the property, being an unsuitable investment, is 
 sold for conversion some time after the beginning of the trust. 
 
 3. Where the property is converted because of its unpro- 
 ductiveness ; such as vacant lots. 
 
 4. Where principal and interest payable during trust are 
 contained in one sum. 
 
 5. On an obligation in which the whole cannot be collected 
 in the realization. 
 
 6. Gain or loss in temporarily conducting a business until 
 it is converted. 
 
 Wasting property, which may be of several kinds: 
 I. Where the waste is indeterminate, until it is suddenly 
 discovered as in the case of a mining property, or in a mining 
 stock. 
 
 The best way to treat this is to give the life tenant a cur- 
 rent rate of interest on the inventory value, out of the gross 
 income received, and to carry the balance to reduce the inven- 
 tory. The current rate is to be continued on the diminishing 
 value so long as there remains any balance. If after the capi- 
 
 * The mesne profits are the profits of land while in the possession of 
 a person not the owner. 
 
56 Accounts of Executors 
 
 tal has been wiped out income should be received, it will form 
 corpus going to the remainderman. Of course, this new corpus 
 should be reinvested so as to yield further income. 
 
 Where the gross income is certain and the waste is de- 
 terminate, but to the extent of only a part of the property: 
 This is the case with a bond purchased by a trustee above par, 
 the waste part being the premium. The rate per cent, the 
 bond is actually yielding is to be determined from bond tables, 
 and from the value of the bond and rate per cent, it yields can 
 be found the interest, which taken from the coupons received 
 gives what is usually called the sinking fund. The income ac- 
 count is debited with the sinking fund and the bond account 
 credited. The bond account is thus reduced in value by the 
 operation, and the process is continued, using each time the 
 diminishing balance, instead of the inventory value, until the 
 premium is wiped out. The same method is appHcable to an 
 annuity receivable by estate, except that the process is con- 
 tinued until the annuity is extinguished. 
 
 3. In the case of a lease to the decedent during his lifetime, 
 in which there is a yearly gain over rent to owner, repairs, in- 
 surance, etc., which has a term of years yet unexpired, the 
 following is the modus operandi for keeping the accounts : 
 
 We presume that there is an account among the assets, repre- 
 senting the inventory value of the lease, which we will call 
 lease account. On receiving and disbursing for account of this 
 lease open another account called realization of lease account. 
 Debit cash yearly with all income and credit the realization 
 account with the same. Also debit realization account yearly 
 with all disbursements and credit cash with the same. Two 
 cases may present themselves : 
 
 (a) The credits may exceed the debits, and the difference 
 will give the net realization, which is made up of both corpus 
 and income received for the year, and which require to be 
 separated. 
 
 (b) The debits may exceed the credits, and the difference 
 contains neither corpus nor income, but simply a diminution of 
 corpus for the year. 
 
 If the second case obtains, debit personal estate account with 
 diminution of corpus and credit realization account with the 
 same. 
 
AND Testamentary Trustees. 57 
 
 To separate the corpus from the income requires: 
 
 1. Choosing a rate per cent, of interest which should be 
 such as can be obtained in investments of a safe kind. 
 
 2. A table of present values at the given rate per cent, of 
 $1, payment of which is deferred, for one, two, three years, etc. 
 
 If there be a net realization at the end of the first year, then 
 multiply the net realization at end of first year by the present 
 value of $1, payment of which is deferred one year at the said 
 rate per cent. If there be a net realization at the end of, say, 
 the third year, then multiply net realization by the present 
 value of $1, payment of which is deferred three years, etc., etc., 
 to obtain the corpus which is then realized. Having obtained 
 it, debit the realization account with it, and credit the lease 
 account with the same. 
 
 At the end of any period debit realization account with net 
 income and credit income account with same. Finally balance 
 the lease account into the personal estate account for increase 
 or decrease of realization over inventory value, when there is 
 an income. 
 
 From observing the entries carried into the personal estate 
 account it will be seen how much the inventory value of lease 
 was overvalued or undervalued. 
 
 Apportionment of rents, annuities and dividends. These 
 relate to sums of money regularly payable or becoming due. 
 
 If an estate merely devolves on another as from a decedent 
 to an heir, or to a life beneficiary, or from an executor to a 
 trustee, the estate is not determined, and there is no appor- 
 tionment; but if an estate is determined by the death of a 
 recipient of the rents, annuities and dividends, then there is an 
 apportionment reckoned from the last payment to the evening 
 of the death of the last recipient. It, however, is only recover- 
 able when the entire amount of which such apportionment 
 forms part becomes due and payable and not before, from the 
 person entitled to collect the whole. 
 
58 
 
 Accounts of Executors 
 
 Edward Brown's Estate 
 
 I 
 
 Debtors to Estate:— 
 
 
 
 I 
 
 Henry Edmonson 
 
 
 
 2 
 
 William Smith 
 
 
 
 3 
 
 Henry Smithson 
 
 
 
 4 
 
 John May 
 
 
 
 1 
 
 Henry Smith 
 
 
 
 I^egacy left to decedent, but not paid him 
 
 
 2 
 
 Creditors of Estate:— 
 
 
 
 I 
 
 William Hopetown 
 
 
 
 2 
 
 Henry Thompson 
 Henry Arnold 
 
 
 
 3 
 
 
 
 4 
 
 Judgment Creditors 
 
 
 3 
 
 Sundry expenses: — 
 
 
 
 I 
 
 Funeral expenses 
 
 
 
 2 
 
 Probate expenses 
 
 
 
 3 
 
 Transfer tax on IvCgacy left decedent 
 
 
 
 4 
 
 Accountant's and Attorney's fees 
 
 
 
 5 
 
 Commission, i. e., Legacy left in lieu of commission 
 
 
 4 
 
 Sundry persons interested in Estate: — 
 
 
 
 I 
 
 Elizabeth Brown, widow of decedent, life beneficiary of proceeds of 
 
 mortgage 
 
 
 2 
 
 John Brown, son of decedent, residuary legatee 
 
 
 
 3 
 
 John Brown, next of kin of Elizabeth Brown 
 
 
 
 CLASSIFICATION OF ACCOUNTS 
 
 
 
 I 
 
 Personal Estate account 
 
 
 
 2 
 
 Asset accounts 
 
 
 
 3 
 
 Distributive accounts 
 
 
 Accounts and Transactions of Henry Arlington, Executor 
 
 1900 
 Dec. 
 
 I 
 I 
 
 
 Dec. 
 
 31 
 31 
 
 
 fS. 
 
 I 
 2 
 
 2 
 
 
 June 
 
 30 
 
 
 July 
 
 I 
 
 
 Edward Brown died this day, having nominated 
 
 H. Arlington Executoi 
 Inventory taken and appraised 
 Mortgages receivable 
 Furniture 
 Cash in house 
 Debts due deceased, Henry Edmonson 
 Wm. Smith 
 Henry Smithson 
 John May 
 Accrued interest on mortgage for 5 months to 
 date 
 
 Found that decedent owes State Transfer tax 
 on legacy left him, being at 5 per cent, on 
 $1,000 
 
 Collected 6 months' interest ($8,000 at 5 per cent.) 
 to date 
 
 Newly discovered assets:— 
 
 Henry Smith's indebtedness to decedent 
 
 Legacy left by Millard Werner, deceased 
 Received above legacy 
 Approved the following claims against Estate:— 
 
 Funeral expenses 
 
 Probate expenses 
 
 William Hopetown, amount of his bill 
 
 Henry Thomson, amount of his bill 
 
 Henry Arnold, amount of his bill 
 Paid the following : — 
 
 Tax on legacy 
 
 Funeral expenses 
 
 Probate expenses 
 
 William Hopetown 
 
 Henry Thomson 
 
 Henry Arnold 
 
 Life beneficiary 
 Received 6 months' interest on mortrage to date 
 Received amount of mortgage paid on this day 
 Henry Edmonson paid his indebtedness to Estate 
 William Smith paid his indebtedness to Estate 
 Henry Smithson paid on account 
 Furniture sold by auction this day 
 Depreciation on sale of furniture 
 Deposited in Knickerbocker Trust Co. 
 
 8,000 
 1,000 
 800 
 1,000 
 500 
 500 
 250 
 
 . 166 
 
 200 
 1,000 
 1,000 
 
 150 
 
 100 
 
 50 
 
 40 
 
 10 
 
 50 
 
 150 
 
 100 
 
 50 
 
 40 
 
 10 
 
 140 
 
 200 
 
 8,000 
 
 1,000 
 
 500 
 
 200 
 
 800 
 
 200 
 
 10,000 
 
 67 
 
 12,216 
 
 67 
 
AND Testamentary Trustees. 
 
 59 
 
 ist December, 1900 
 
 Sundries to Personal Bstale account 
 
 Mortgages receivable 
 
 Furniture 
 
 Cash in house 
 Debts due decedent : — 
 
 Henry Edmonson 
 
 William Smith 
 
 Henry Smithson 
 
 John May 
 
 Interest accrued on mortgage for 5 months to date 
 As per inventory taken this day 
 
 -31st December, 1900- 
 
 Personal Estate account 
 To L,egacy account 
 For amount of transfer tax on legacy to deceased 
 
 1st Februarj', 1901- 
 
 Sundries to Personal Estate account 
 For newly discovered assets 
 Henry Smith, indebtedness to Estate 
 I,egacy from Estate of Millard Werner 
 
 -2nd February, 1901- 
 
 Personal Estate to Sundries 
 Funeral expenses 
 Probate expenses 
 Wm. Hopetov/n, amount of his bill 
 Henry Thomson, amount of his bill 
 Heary Arnold, amount of his bill 
 
 ■ 30th June, 1901- 
 
 Personal Estate account 
 
 To Furniture account 
 
 For depreciation on sale of furniture 
 
 8,000 
 
 1,000 
 
 800 
 
 1,000 
 
 500 
 500 
 250 
 166 
 
 200 
 1,000 
 
 350 
 
 67 
 
 12,216 
 
 50 
 
 1,200 
 
 67 
 
 In Accordance with Decree of Surrogate, it Will Be Necessary to 
 Make the Following Entries : 
 
 Personal Estate account to Cash 
 To pay judgment creditors 
 
 Personal Estate account to Cash 
 
 For commission 500 
 
 For Accountant's and Attorney's fee 500 
 
 lyife beneficiary account to Cash 
 
 For amount paid John Brown as next of kin 
 Personal Estate account to Sundries 
 
 Cash 
 
 Knickerbocker Trust Co. 
 
 H. Smithson's account (Assignment) 
 
 Jno. May's account (Assignment) 
 
 For assets turned over to John Brown as residuary 
 legatee 
 
 The above entries have been posted to their respective 
 accounts as of ist July, 1901, in order to close accounts 
 of the I,edger 
 
 700 
 
 1,000 
 
 60 
 11,150 
 
 700 
 
 1,000 
 
 60 
 
 400 
 
 10,000 
 
 500 
 
 250 
 
6o 
 
 Accounts of Executors 
 
 Dr. Cash Book and Cash Account of Estate of Edward Brown. 
 
 1900 
 
 Dec. 
 
 1901 
 June 
 
 July 
 
 Cash in house as per inventory 
 
 Interest accrued account — Interest to ist inst. 
 
 166.67 
 Ivife beneficiary account— Interest from ist 
 
 inst. to date 33.33 
 
 I,egacy account — Received legacy left E. Brown 
 
 by the late Millard Werner 
 Ivife beneficiary account — Interest to 31st 
 
 May, 1901, when life beneficiary 
 
 died 166.67 
 
 Personal Estate account — Interest from 31st 
 
 May, to date 33.33 
 
 Mortgage receivable account — Mortgage paid oflF 
 
 this day 
 H. Edmonson paid his indebtedness 
 H. Smith paid his indebtedness 
 Henry Smith paid his indebtedness 
 Furniture account — Sold by auction this day 
 
 Balance 
 
 800 
 
 8,000 
 
 1,000 
 
 500 
 
 200 
 
 800 
 
 12,700 
 
 2,160 
 
 I 2,160 
 
 Cash Book and Cash Account of Estate of Edward Brown. Cr. 
 
 1901 
 
 Feb. 
 
 July 
 
 July 
 
 Legacy account — Paid tax on legacy 
 
 Funeral expenses account— Undertaker's bill 
 
 Probate expenses— paid this day 
 
 William Hopetown — paid this day 
 
 Henry Thomson— paid this day 
 
 Henry Arnold— paid this day 
 
 lyife beneficiary— paid her on account 
 
 Knickerbocker Trust Co.— deposited this date at 
 
 2 per cent. 
 Balance 
 
 John Brown, as widow's next of kin 
 
 Commission 
 
 Accountant's and Attorney's fees 
 
 John Brown, residuary legatee 
 
 Judgment creditors 
 
 10,000 
 2,160 
 
 60 
 500 
 500 
 400 
 700 
 
 12,700 
 
 2,160 
 
AND Testamentary Trustees. 
 
 6i 
 
 Dr. 
 
 LEDGER OF ESTATE OF EDWARD BROWN 
 (i) Personal Estate Account 
 
 Cr. 
 
 1900 
 
 Dec 
 
 I?eb. 
 
 Jiuie 
 
 July 
 
 July 
 
 Transfer tax on legacy 
 
 Funeral expenses 
 Probate expenses 
 William Hopetown 
 H. Thomson 
 H. Arnold 
 Depreciation of 
 furniture 
 
 Balance 
 
 Distributed by decree : 
 Judgment creditors 
 Administration expen- 
 ses 
 John Brown, residu- 
 ry legatee 
 
 50 
 
 
 L^. 
 
 31 
 
 150 
 
 100 
 
 50 
 
 40 
 
 10 
 
 
 
 
 200 
 
 
 
 
 600 
 
 
 
 
 12,850 
 
 
 '& 
 
 I 
 
 
 
 June 
 
 30 
 
 13,450 
 
 - 
 
 July 
 
 I 
 
 700 
 
 1,000 
 
 
 
 
 11,150 
 
 — 
 
 
 
 12,850 
 
 
 Mortgages receivable 
 Furniture 
 Cash in house 
 Debts due deceased 
 Henry Bdmonson 
 William Smith 
 Henry Smithson 
 John May 
 
 Accrued interest on 
 mortgage 
 
 Henry Smith for debt 
 not included in in- 
 ventory. 
 
 lyCgacy left by Mr. 
 Werner. 
 
 Interest from 31st of 
 May to date 
 
 Balance 
 
 8,000 
 
 1,000 
 
 800 
 
 I.OOO 
 
 500 
 500 
 250 
 
 166 
 
 12,216 
 
 200 
 1,000 
 
 33 
 
 13,450 
 
 12,850 
 
 12,850 
 
 33 
 
 (2) Mortgages Receivable 
 
 1900 
 
 Dec. 
 
 Personal est. account 
 
 8,000 
 
 1901 
 June 
 
 30 
 
 Cash 
 
 8,000 
 
 (3) Furniture Account, of which the Widow has the Use During 
 
 Her Life. 
 
 1900 
 
 Dec. 
 
 Personal est. account 
 
 1901 
 June 
 
 Proceeds of sale 
 Personal est. account 
 for loss on sale 
 
 800 
 200 
 
62 
 
 Accounts of Executors 
 
 Dr. 
 
 LEDGER OF ESTATE OF EDWARD BROWN 
 (4) Debts Due Estate of Edward Brown 
 
 Cr. 
 
 1900 
 Dec. 
 
 Feb. 
 
 I 
 
 I 
 I 
 
 H. Edmonson 
 Wm. Smith 
 Henry Smithson 
 John May 
 
 Henry Smith 
 
 H. Smithson 
 Jno. May 
 
 t,ooo 
 
 500 
 500 
 250 
 
 200 
 
 
 1901 
 June 30 
 
 July 1 
 
 June 30 
 
 July I 
 
 I 
 
 H. Edmonson 
 Wm. Smith 
 Carried down 
 
 Henry Smith 
 
 Personal estate 
 Personal estate 
 
 1,000 
 500 
 500 
 250 
 200 
 
 2,450 
 
 
 
 2,450 
 
 
 July 
 
 500 
 250 
 
 750 
 
 : 
 
 500 
 250 
 
 
 
 750 
 
 
 
 
 
 
 (5) Interest Accrued to ist December, 1900 
 
 1900 
 
 Dec. 
 
 I 
 
 Personal est. account 
 
 166 
 
 67 
 
 1900 
 Dec. 
 
 31 
 
 Cash 
 
 166 
 
 67 
 
 
 
 
 
 (6) Knickerbocker Trust Co. 
 
 1901 
 July 
 
 I 
 
 Cash deposited at 2 per 
 cent, per annum 
 
 10,000 
 
 1 
 
 1 
 1901 
 July 1 
 
 John Brown, R. L. 
 
 10,000 
 
 
 
 
 
 (7) T.ETwACY Receivable Account 
 
 1901 
 
 Feb. 
 
 I 
 2 
 
 Personal est. account 
 Paid transfer T. 
 
 1,000 
 
 - 
 
 1901 
 
 Feb. 
 
 31 
 
 I 
 
 Personal est. account 
 
 » 
 
 Cash 
 
 50 
 1,000 
 
 
 
 1,050 
 
 2,050 
 
 
 
 
 
 
 DISTRIBUTION ACCOU 
 
 (8) Life Beneficiary Account (the wid 
 
 NTS 
 
 
 ow died 31st May, 
 
 1900) 
 
 1901 
 
 Feb. 
 July 
 
 I 
 I 
 
 Cash on account 
 Balance 
 
 Jno. Brown, next of kin 
 
 ■s 
 
 - 
 
 1901 
 June 
 
 July 
 
 31 
 30 
 
 1 
 
 Interest 
 
 Interest from 31st Dec. 
 1900, to 31st May, 1901 
 
 Balance 
 
 33 
 166 
 
 33 
 67 
 
 
 200 
 
 200 
 
 
 July 
 
 60 
 
 60 
 
 
 
 
 
 — 
 
AND Testamentary Trustees. 63 
 
 LEDGER OF ESTATE OF EDWARD BROWN 
 Dr. (9) Funeral Expenses Cr, 
 
 1901 
 
 Feb. 
 
 Cash 
 
 150 
 
 1901 
 Feb. 
 
 2 Personal est. account 
 
 
 
 (10 
 
 ) 
 
 Probate Expenses 
 
 
 
 I90I 
 
 Feb. 
 
 i 
 2 Cash 
 
 
 100 
 
 
 Tel 
 
 2 
 
 Personal est. account 
 
 100 
 
 
 
 
 
 
 (11) Debts Due by Estate (Creditors). 
 
 1901 
 
 Feb. 
 
 Paid Wm. Hopetown 
 " Henry Thomson 
 " H. Arnold 
 
 1901 
 Feb. 
 
 Wm. Hopetown 
 H. Thomson 
 H. Arnold 
 
 (12) Trial Balance ist July, 1901, before S. Decree 
 
 Cash from C. B. 
 Henry Smithson 
 John May 
 Knickerbocker T. Co. 
 
 2,160 
 
 500 
 
 250 
 
 10,000 
 
 12, 910 
 
 Personal est. account 
 Kst. Life Beneficiary 
 
 12,850 
 60 
 
 12,910 
 
64 
 
 Accounts of Executors 
 
 Contents of Schedules, Surrogate Court of County of New York 
 
 Amount of Inventory 
 
 -Schedule A- 
 
 Sales:— 
 
 Furniture 
 
 Debts mentioned in Inventory, which have been col- 
 lected:— 
 Henry Edmonson $i,ooo 
 
 William Smith 5cx5 
 
 Interest collected: — 
 
 Total 400 
 
 lycss included in Inventory 166.67 
 
 -Schedule B- 
 
 Debts not collected or collectible: — 
 
 Henry Smithson 500 
 
 John May 250 
 
 I/Osses by accident 
 Assets discovered after taking of Inventory:— 
 
 Debt due Estate by Henry Smith 200 
 
 lyCgacy left deceased 1,000 
 
 -Schedule C- 
 
 Expenses: — 
 
 Untertaker's bill 
 Probate expenses 
 Transfer Tax on legacy 
 
 150 
 100 
 50 
 
 -Schedule D- 
 
 Judgment Creditors: — 
 Allowed 
 Disputed 
 
 Moneys paid to Creditors: 
 William Hopetown 
 Henry Thomson 
 Henry Arnold 
 
 248 
 452 
 
 -Schedule E- 
 
 AU moneys paid to widow 
 All moneys paid to next kin 
 
 140 
 000,00 
 
 -Schedule F- 
 
 Elizabeth Brown, widow of deceased, 18 St. James Place, 
 Brooklyn 
 
 John Brown, son of deceased, 18 St. James Place, Brook- 
 lyn 
 
 Schedule G 
 
 H. Arlington, Executor, legacy in lieu of commission 
 
 Balance due widow 
 Interest on mortgage from death of decedent to death of 
 widow, viz., fromi st Dec. 1900 to 31st May 200 
 icK)3 
 Paid her on account 
 
 LOSSES ON SALES 
 
 Appraised value of furniture 
 Net return of sale 
 
 140 
 
 1,000 
 800 
 
 800 
 
 1,500 
 
 750 
 000 
 
 300 
 
 •100 
 
 140 
 
 60 
 
 33 
 
 67 
 
AND Testamentary Trustees. 
 
 65 
 
 Accounting Before Surrogate 
 
 I/Henry Arlington, Executor,chargemyself as follows:— 
 With amount of inventory 
 With increase as shown in Schedules A and B 
 Interest received 
 Newly discovered assets 
 
 I credit myself as follows:— 
 
 With loss on sales as per Schedule G 
 With debts not collected, Schedule B 
 With expenses as per Schedule C 
 With moneys paid to creditors, Schedule D 
 With all moneys paid to widow and next of kin, 
 Schedule E 
 
 Debts not collected. Schedule B 
 Total amount to be distributed 
 
 Decree of Surrogate 
 
 Amounts coming to residuary legatee, John Brown: 
 Debts not collected 
 Cash 
 Knickerbocker Trust Co., deposit 
 
 Amounts to be paid by Executor:— 
 
 Due John Brown as widow's next of kin 
 Commission allowed 
 Accountant's and Attorney's fees 
 Judgment creditors 
 
 233 
 1,200 
 
 200 
 750 
 300 
 100 
 
 140 
 
 750 
 
 400 
 
 10,000 
 
 33 
 
 13,650 
 
 12,160 
 750 
 
 12,910 
 
 ",150 
 
 1,760 
 12,910 
 
66 Accounts of Executors 
 
 Executor and Trustee Combined, with Account Carried to a Certain 
 
 Point 
 
 -Estate of John Hoskine 
 
 Under a Trust Deed, John Hoskins deeded to William Smith in trust his propertj'^ 
 
 both Real and Personal, to carry out the provisions of the Trust 
 Under the Trust Deed, the following are the principal provisions of the Trust: — 
 
 1 He leaves to his wife, as life beneficiary, the gross income from his personal prop- 
 
 erty, and the use of his household furniture 
 
 2 He leaves to his only son, John Hoskins, all his Real Estate 
 
 3 He leaves to his only daughter, Mary, a legacy of $5,000, to be paid to her as soon 
 
 as convenient after his death 
 
 4 He leaves a life insurance policy to Wm. Smith as Trustee, to be collected and to 
 
 form part of the fund of his personal property 
 
 5 The Estate is to be carried on to the death of his wife, and the Real Estate to be 
 
 transferred to the son, at the discretion of the Trustee, who is required to turn 
 over the rents to the son as they are collected 
 
 John Hoskins died 31st March, 1899 
 
AND Testamentary Trustees. 
 
 67 
 
 Journal 
 
 4th April, 1899 
 
 Sundries to Personal Estate account 
 Cash in Bank 
 Household furniture 
 Bank shares 
 Life insurance policy 
 
 On deposit with Trust Co., principal and interest 
 Rent due but not paid 
 As per Inventory made by appraisers this day 
 
 loth April, 1899 
 
 Personal Estate account. Sundries 
 
 For outstanding debts due by deceased, which are al- 
 lowed, as there are sufficient funds to meet all demands 
 
 Servants' wages 
 
 A. Langstadter's bill 
 
 Wm. Anderson, loan from him 
 
 John Harris' bill 
 
 Daniel Tompson's bill 
 
 William Fife's bill 
 
 Brooks Bros.' bill 
 
 Acker, Merrill & Condit's bill 
 
 -loth April, 1899- 
 
 Personal Estate account to Sundries 
 
 Funeral expenses — Undertaker's bill 
 
 Dr. Sampson's bill for medical attendance 
 
 -19th April, 1899- 
 
 Personal Estate account 
 To Transfer tax 
 Paid on net assets to N. Y. State 
 
 13th May, 1899 
 
 Bank Shares account 
 
 To life beneficiary account 
 
 For her portion of dividend (interest), from 31st 
 March, 1899, to date 
 
 -13th May, 1899 - 
 
 Bank Shares account 
 
 To Personal Estate account 
 
 For profit on sale of Bank shares 
 
 14th May, 1899 
 
 Trust Co.'s account 
 
 To life beneficiary account 
 
 For interest from 31st March, 1899, to date 
 
 loth June, 1899 
 
 Personal Estate account 
 To Legacy account 
 For legacy left Mary Hoskins 
 
 loth June, 1900 
 
 Personal Estate account 
 
 To expenses on realization and administration 
 
 For total expenses chargeable against capital 
 
 Commission 250 
 
 Legal expenses 375-87 
 
 Miscellaneous . 50 
 
 250 
 
 2,000 
 
 
 65,769 
 
 45,250 
 
 15,000 
 2,019 
 1.250 
 
 29 
 
 
 3,557 
 
 47 
 
 150 
 
 85 
 105 
 152 
 
 ^ 
 
 50 
 
 150 
 52 
 
 2,463 
 
 83 
 
 2,463 
 
 235 
 
 62 
 
 235 
 
 289 
 
 38 
 
 289 
 
 6 
 
 12 
 
 6 
 
 5,000 
 
 
 5,000 
 
 675 
 
 87 
 
 675 
 
 87 
 
68 
 
 Accounts of Executors 
 
 Dr. Cash Book and Cash Account of Estate of John Hoskins 
 
 April 
 May 
 
 4 
 18 
 
 13 
 
 
 14 
 
 
 15 
 
 Nov. 
 
 15 
 
 1900 
 May 
 
 15 
 
 June 
 
 10 
 
 Cash in Bank 
 
 Life insurance account — Collection of policy 
 
 Bank shares account— Sold 400 shares at $115, less 
 expenses of sales $225 
 
 Trust Co. account — Withdrawn deposit $2,000 
 with interest to date 
 
 Rents due but unpaid at decedent's death: — 
 Andrew Mason 375 
 
 Wm. J. Renall 500 
 
 Maiy Hoskins 375 
 
 Rent account — Rent from John Hardy due since 
 
 testator's death 
 Life beneficiary account — 6 months' interest to 
 date on mortgage on No. 40 W. 28th St. 
 
 Life beneficiary account — 6 months' interest to 
 date on mortgage on No. 40 W. 28th St. 
 
 250 
 15,000 
 
 ! 45,775 
 2,025 
 
 1,250 
 250 
 
 1,030 
 
 1,030 
 
 Balance 
 
 66,610 
 
 Cash Book and Cash Account of Estate of John Hoskins. Cr. 
 
 Funeral expenses 
 
 Sundry Creditors account — 
 
 Paid Dr. Sampson's bill 
 Servants' wages 
 A. Langstadter's bill 
 Wm. Anderson's loan 
 John Harris' bill 
 Daniel Tompson's bill 
 Wm. Fife's bill 
 Brooks Bros.' bill 
 Acker, Merrill & Condit's bill 
 Transfer tax paid this day 
 Rent account — Paid John Hoskins rent received 
 
 from John Hardy 
 Mortgage receivable account — Loan made this 
 day secured by mortgage on No. 40 W. 
 28th St., N. Y. 
 Legacy account— Paid Mary Hoskins her legacy 
 Life beneficiary account— Paid life beneficiary 
 on account this day 
 
 Life beneficiary account— Paid life beneficiary 
 
 on account this day 
 Expenses of realization and administration: — 
 
 Commission to Executor 250 
 
 Legal expenses 375-87 
 
 Miscellaneous expenses 50 
 
 Balance 1,210 74 66,610 41 
 
 1899 
 
 April 
 
 10 
 
 May 
 
 19 
 15 
 
 June 
 Nov. 
 
 10 
 12 
 
 1900 
 May 
 
 12 
 
 June 
 
 10 
 
 1 
 
 150 
 
 1 
 
 
 52 
 
 50 
 
 
 150 
 
 
 
 75 
 
 12 
 
 
 2,656 
 
 25 
 
 
 272 
 
 62 
 
 
 . 60 
 
 62 
 
 
 85 
 
 62 
 
 
 105 
 
 12 
 
 
 152 
 
 12 
 
 
 2,463 
 
 «3 
 
 
 1 250 
 
 
 
 51,500 
 
 
 
 5,000 
 
 
 
 750 
 
 
 
 1,000 
 
 
 
 675 
 
 87 
 
 
 1,210 
 
 74 
 
 66,610 
 
 
 
Dr. 
 
 AND Testamentary Trustees. 69 
 
 LEDGER OF ESTATE OF JOHN HOSKINS 
 
 (i) Personal Estate Account Cr. 
 
 1899 
 
 
 
 
 
 1899 
 
 
 
 
 
 Apr. 
 
 10 
 
 Servants' wages 
 
 150 
 
 
 Apr. 
 
 4 
 
 Cash in bank 
 
 250 
 
 
 
 
 A. I^angstadter's bill 
 
 75 
 
 12 
 
 
 
 Household furniture 
 
 2,000 
 
 
 
 
 W. Anderson, loan 
 
 
 
 
 
 Bank shares 
 
 45,250 
 
 
 
 
 from him 
 
 2,656 
 
 2.'> 
 
 
 
 Life insurancy policy 
 
 15,000 
 
 
 
 
 John Harris' bill 
 
 272 
 
 62 
 
 
 
 Trust Co., principal 
 
 
 
 
 
 D. Tompson's bill 
 
 60 
 
 62 
 
 
 
 and interest 
 
 2,019 
 
 29 
 
 
 
 W. Fife's bill 
 
 85 
 
 62 
 
 
 
 Rents due but not paid 
 
 1,250 
 
 
 
 
 Brooks Brothers' bill 
 
 105 
 
 T2 
 
 
 
 
 
 
 
 
 Acker, Merrill & Condit 
 
 152 
 
 12 
 
 
 
 
 
 
 
 
 Dr. Sampson's bill 
 
 52 
 
 SO 
 
 
 
 
 
 
 
 
 Undertaker's bill 
 
 150 
 
 
 
 
 
 
 
 
 
 Balance 
 
 62,009 
 
 32 
 29 
 
 
 
 
 
 
 
 65,769 
 
 65,769 
 
 29 
 
 
 iq 
 
 Transfer Tax 
 
 2,463 
 
 8^ 
 
 Apr. 
 
 10 
 
 Balance 
 
 62,009 
 
 ^2 
 
 June 
 
 10 
 
 I^egacy 
 
 5,000 
 
 
 May 
 
 i'^ 
 
 Profit on sale of bank 
 
 
 
 1900 
 
 
 
 
 
 
 
 shares 
 
 289 
 
 ^8 
 
 June 
 
 10 
 
 Commission 
 Legal expenses 
 Miscellaneous exp. 
 
 250 
 375 
 50 
 
 87 
 
 
 
 
 
 
 
 
 Balance 
 
 54,159 
 
 
 June 
 
 10 
 
 Balance 
 
 
 
 
 62,298 
 
 70 
 
 62,298 
 
 70 
 
 
 
 54,159 
 
 
 (2) Household Furniture Account 
 
 1899 
 
 Apr. 
 
 Personal est. account < 2,000 
 
 
 (3) Life Insurance Account 
 
 
 1899 
 
 Apr. 
 
 4 Personal est. account 15,000 
 
 i 
 
 1899 
 Apr. 
 
 18 Cash 
 
 j 
 
 j 15,000 
 
 
 1 1 
 
 
 1 
 
 (4) Bank Shares Account 
 
 1899 
 
 
 Apr. 
 
 4 
 
 .May 
 
 13 
 
 
 13 
 
 Personal est. account I 45,250 
 Dividend from 31st 
 
 Mch. 1899 to date 
 Personal est. for profit 
 
 on sale 
 
 1 
 
 45,250 
 
 
 May 
 
 13 
 
 235 
 
 62 
 
 
 
 289 
 
 38 
 
 
 
 45,775 
 
 Proceeds of sale 
 
 45,775 
 
 45,775 
 
 
 
 (S) Trust 
 
 Company 
 
 A.CC0UNT 
 
 
 
 1899 
 
 Apr. 
 May 
 
 4 
 14 
 
 Personal est. account 
 Life beneficiary for in- 
 terest to date 
 
 2,019 
 6 
 
 29 
 12 
 41 
 
 May 
 
 14 
 
 Cash 
 
 2,025 
 
 41 
 
 
 2,025 
 
 2,025 
 
 41 
 
 
 
 
 
 
70 
 
 Accounts of Executors 
 
 Dr. 
 
 LEDGER OF ESTATE OF JOHN HOSKINS 
 (6) Mortgage Receivable Account 
 
 Cr. 
 
 1899 
 
 May 
 
 lyoan made this day 
 secured by mort- 
 gage on 40 W. 28th 
 St., New York 
 
 5^500 
 
 (7) Rents Due But Not Paid at Decedent's Death 
 
 1899 
 
 Apr. 
 
 Personal est. account 
 
 1,250 
 
 1899 
 May 
 
 Andrew Mason 
 Wm. J. Renall 
 Mary Hoskins 
 
 375 
 500 
 375 
 
 1,250 
 
 
 (8) 
 
 Funeral Expenses. 
 
 
 
 1899 
 
 Apr. 
 
 19 Cash 
 
 150 
 
 J 
 
 1899 1 1 
 
 Apr. 10 personal est. account 
 
 150 
 
 
 
 
 
 
 
 
 (9) Creditors of Estate 
 
 1899 
 
 Apr. 
 
 Paid servants' wages 
 Paid A. Langstadter 
 Paid W. Anderson 
 Paid J. Harris 
 Paid D. Tompson 
 Paid W. Fife 
 Paid Brooks Bros. 
 Acker, Merrill &Condit 
 Dr. Sampson's 
 
 
 
 1899 
 
 
 150 
 
 
 Apr. 
 
 10 
 
 72 
 
 12 
 
 
 
 2,656 
 
 25 
 
 
 
 272 
 
 62 
 
 
 
 60 
 
 62 
 
 
 
 85 
 
 62 
 
 
 
 105 
 
 12 
 
 
 
 152 
 
 12 
 
 
 
 52 
 
 50 
 
 
 
 3,609 
 
 97 
 
 
 
 
 
 1 
 
 ! 
 
 Servants' wages 
 
 A. L,angstadter's bill 
 
 Wm. Anderson 
 
 J. Harris' bill 
 
 D. Tompson's bill 
 
 W. Fife's bill 
 
 Brooks Brothers' bill 
 
 Acker, Merrill StCondit 
 
 Dr. Sampson' s*bill 
 
 150 
 
 75 
 
 2,656 
 
 272 
 60 
 85 
 
 105 
 
 152 
 52 
 
 3,609 
 
 (10) Rent Account 
 
 1899 
 
 May 
 
 Paid J. Hoskins, son of 
 decedent, rent re- 
 ceived 
 
 250 
 
 May 
 
 Rec'd from Jno. Hardy 
 rent due since tes- 
 tator's death 
 
 (11) Legacy Account 
 
 1899 
 
 June 
 
 Cash 
 
 1899 
 June 10 
 
 Personal est. account 
 
 5,000 
 
AND Testamentary Trustees. 
 
 71 
 
 LEDGER OF ESTATE OF JOHN HOSKINS 
 Dr. (12) Life Beneficiary Account (Died 14th May, 1900) Cr. 
 
 1899 
 
 Nov. 
 1900 
 May 
 June 
 
 12 
 
 12 
 10 
 
 Pd I,. B. on account 
 
 Pd L. B, on account 
 Balance 
 
 750 
 
 1,000 
 
 551 
 
 74 
 74 
 
 i!99 
 May 
 
 Nov. 
 
 1900 
 May 
 
 June 
 
 13 
 14 
 15 
 
 15 
 10 
 
 Interest on B. S. to date 
 Interest from Trust Co. 
 6 mos. interest to date 
 
 6 mos. interest to date 
 Balance 
 
 ^^6 
 
 1,030 
 
 1,030 
 
 2,301 
 
 62 
 
 12 
 
 
 2,301 
 
 74 
 
 
 
 551 
 
 1'^ 
 
 
 
 
 (13) Transfer 
 
 Tax 
 
 
 
 1899 
 Apr, 
 
 19 
 
 Cash 
 
 2,463 
 
 83 
 
 1899 
 
 Apr. 
 
 T9 
 
 Personal est. account 
 
 2.463 
 
 83 
 
 
 
 _ 
 
 
 
 (14) Expenses of Realization and Administration 
 
 1900 
 
 June 
 
 Commission 
 Legal expenses 
 Miscellaneous 
 
 250 
 375 
 50 
 
 675 
 
 1900 
 June 
 
 Cash 
 
 87 
 
 67^ 87 
 
 (15) Trial Balance 20th June, 1900 
 
 Cash 
 
 Household furniture 
 
 Mortgages receivable 
 
 1,210 
 
 2,000 
 
 51.500 
 
 54,710 
 
 74 
 
 Life beneficiary estate 
 Personal est. account 
 
 551 
 54,159 
 
 54,710 
 
72 
 
 Accounts of Executors 
 
 Account of Charge and Discharge of Management 
 Death of Testator, 31st March, 1899 
 
 
 1899 
 
 Apr. 
 
 Apr. 
 May 
 
 1899 
 May 
 
 Nov. 
 
 190C 
 May 
 
 I 
 4 
 
 I 
 
 18 
 13 
 14 
 15 
 
 15 
 
 15 
 15 
 
 Charge 
 
 FOR ACCOUNT OF CAPITAL 
 
 Estate as given in inventory:— 
 Cash in Bank 
 Household furniture 
 Bank shares 
 Ivif e insurance policy 
 On deposit with Trust Co. Deposit 
 
 Interest to date 
 
 Rents due and unpaid 
 
 Funds and Estate realized: — Inventory 
 Cash in Bank 250 
 Amount of life insurance policy 15,000 
 Proceeds of sale of Bank shares 45,250 
 Deposit in Trust Company 2,019.29 
 Rents due and unpaid 1,250 
 
 2,000 
 19 
 
 1 
 
 1 
 1 
 
 I 
 
 i 
 29 
 
 ed 
 
 41 
 
 41 
 29 
 
 12 
 
 74 
 
 250 
 
 2,000 
 
 45,250 
 
 15,000 
 
 2,019 
 
 1,250 
 
 29 
 
 
 Realiz- 
 
 250 
 
 15,000 
 
 45,775 
 
 2,025 
 
 1,250 
 
 
 
 65,769 
 
 289 
 66,058 
 
 00,000 
 66,058 
 
 2,301 
 68,360 
 
 29 
 
 
 63,769.29 
 
 64,300 
 63,769 
 
 
 
 Gross gain including income 
 
 Ivcss portion belonging to income:— 
 
 Portion of dividend on Bank shares 
 held from 31st March, 1899, to 13th 
 May, 1899 235.62 
 Interest on deposit in Trust Co. from 
 31st March, 1899, to 14th May, 1900 6.12 
 
 Total Capital realized 
 
 Rents received: — 
 
 From Andrew Mason 
 Wm. J. Renall 
 Mary Hoskins 
 John Hardy 
 
 I^ess rents belong to capital paid as above 
 
 Paid John Hoskins, .sole heir 
 
 For account income:— 
 
 6 months' interest on mortgage on No. 40 
 W. 28th St., to date 
 
 6 months' interest on mortgage on No. 40 
 W. 28th St., to date 
 
 Add: Portion of dividend of bank shares 
 contained in selling price from 31st 
 March, 1899, to 15th May, 1899 235.62 
 
 Interest on deposit in Trust Co. from 31st 
 
 March, 1899, to 14th May, 1899 6.12 
 
 531 
 241 
 
 38 
 
 
 375 
 500 
 
 375 
 250 
 
 67 
 
 
 1,500 
 1,250 
 
 74 
 
 
 
 *25o 
 250 
 
 00 
 
 
 1,030 
 1,030 
 
 67 
 
 
 2,060 
 241 
 
 74 
 
 
 Total of charge 
 
 REAL ESTATE 
 
 By terms of Trust Deed this property has 
 been conveyed by Trustee to John 
 Hoskins, son of decedent, and is 
 valued at 45,000 
 
 
 41 
 
 
 
 
AND Testamentary Trustees. 
 
 75 
 
 OF THE Executor and Trustee of Estate of John Hoskins 
 Death of L. B., 14th May, 1900. 
 
 1899 
 
 Apr. 
 
 June 
 
 1900 
 June 
 
 1899 
 May 
 1900 
 May 
 
 19 
 
 III 
 
 1899 
 May 
 
 -Discharge- 
 
 payments OUT OF CAPITAL 
 
 1. Funeral expenses 
 
 2. Debts due by deceased: — 
 
 Dr. Sampson's bill 
 
 Servants' wages 
 
 A. I^angstadter's bill 
 
 William Anderson's bill 
 
 Daniel Tompson's bill 
 
 John Harris' bill 
 
 William Fife's bill 
 
 Brooks Bros' bill 
 
 Acker, Merrill & Condit's bill 
 
 3. Transfer tax 
 
 4. I,egacy paid 
 
 5. Expenses of realization and administration: 
 
 Commission to executor 
 Legal expenses 
 Miscellaneous expenses 
 
 Total, payments out of capital 
 
 PAYMENTS OUT OF INCOME 
 
 I. Payments to life beneficiary: — 
 
 Paid life beneficiary on account 
 
 Paid life beneficiary on account 
 
 2. Expenses of management and other charges 
 Estate as of loth June, 1900; — 
 
 Mortgage on No. 40 West 28th St., N. Y. 
 
 Household furniture 
 
 Cash in Bank 
 
 INVESTMENTS MADE 
 
 Made loan this dav, secured by mortgage 
 on No. 40 W. 28th St., N, Y., af 4 
 per cent, per annum 5i>5oo 
 
 52 
 150 
 
 75 
 2,656 
 
 60 
 272 
 
 85 
 105 
 152 
 
 750 
 1,000 
 
 51,500 
 2,000 
 1,210 
 
 87 
 
 150 
 
 3.609 
 2,463 
 5,000 
 
 675 
 
 11,899 
 
 1,750 
 
 13,649 
 00,000 
 
 54,710 
 
 68,360 
 
 67 
 
 74 
 
74 
 
 Accounts of Executors 
 
 Another Form by Means of Schedules 
 
 1899 
 
 May 
 
 Nov. 
 
 1900 
 May 
 
 1899 
 May 
 1900 
 May 
 June 
 
 1900 
 June 
 
 I. Income Received 
 
 For life beneficiary's portion of dividend on Bank 
 shares from 31st March, 1899, to date 
 
 6 months' interest to date on mortgage on No. 40 
 W. 28th St., N. Y. 
 
 Interest on deposit in Trust Co. from 31st March, 
 
 1899, to date 
 6 months' interest to date on mortgage on No. 40 
 
 W. 28th St., N. Y. 
 
 II. Income Paid 
 
 None 
 
 Summary of income: — 
 Income received 
 Income paid 
 
 Amount paid life beneficiary: — 
 
 Cash paid life beneficiary on account 
 
 Cash paid life beneficiary on account 
 Amount due life beneficiary 
 
 III. Changes in Investments 
 Inventory:— 
 Cash 
 
 lyife insurance policy 
 Bank shares 
 
 Deposit in Trust Company 
 Rent due and unpaid 
 Household furniture 
 
 Assets realized: — 
 Cash on hand 
 Sale of Bank shares:— Sale 45,775 
 
 L,ess accrued dividend 235.62 
 
 Household furniture 
 
 Amount of life insurance policy 
 
 Withdrawn from Trust Co. 
 
 Withdrawn 2,025.41 
 lycss interest 6.12 
 
 Received rent due and unpaid 
 
 Less inventory value as above 
 
 Increase of assets 
 
 IV. Additions to Principal 
 
 235 
 1,030 
 
 6 
 1,030 
 
 0,000 
 
 2,301 
 0,000 
 
 750 
 
 1,000 
 551 
 
 250 
 
 15,000 
 
 45,250 
 
 2,019 
 
 1,250 
 
 2,000 
 
 250 
 
 45,539 
 
 2,000 
 15,000 
 
 2,019 
 1,250 
 
 62 
 
 29 
 
 38 
 
 29 
 
 2,301 
 
 2,301 
 
 65,769 
 
 66,058 
 65,769 
 
 74 
 
 74 
 
 74 
 
 29 
 
AND Testamentary Trustees. 
 
 75 
 
 1900 
 
 June 
 
 V. Deduction from Principal 
 
 
 
 Charges against reminderman: — 
 
 
 
 Dr Sampson's bill 
 
 52.50 
 
 
 Servants' wages 
 
 150 
 
 
 A. Langstadter's bill 
 
 75-12 
 
 
 William Anderson's loan to de- 
 
 
 
 cedent 
 
 2,656.25 
 
 
 John Harris' bill 
 
 272.62 
 
 
 Daniel Tompson's bill 
 
 60.62 
 
 
 Wm Fife's bill 
 
 85.62 
 
 
 Brooks Bros.' bill 
 
 105.12 
 
 
 Acker, Merrill & Condit's bill 
 
 152.12 
 
 3,609 
 
 Funeral expenses, Undertaker's bill 
 
 
 150 
 
 Transfer tax 
 
 
 2,463 
 
 Legacy to Mary Hoskins 
 
 
 5,000 
 
 Expenses in realization and administration: — 
 
 Commission 250 
 
 Legal expenses 375-87 
 
 Miscellaneous expenses 50 
 
 VI. Principal on Hand 
 
 Cash: — Cash on hand 1,210.74 
 
 Less due life beneficiary 551-74 
 Household furniture 
 Mortgage on No. 40 W. 28th St., N. Y. 
 
 Summary of principal: — 
 Inventory 
 
 Increase from transfers 
 Addition to principal 
 
 Less deductions from principal 
 
 Net total principal 
 
 11,223 
 
 675 
 
 659 
 
 2,000 
 
 51,500 
 
 65,769 
 289 
 000 
 
 97 
 
 83 
 
 67 
 
 11,899 
 
 54,159 
 
 66,058 67 
 11,899] 67 
 54,195 i 
 
 >>».,.. »», 
 
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 14 DAY USE 
 
 RFTUKN TO DESK FROM WHICH BORROWED 
 
 LOAN DEPT. 
 
 This book is due on the last date stamped below, or 
 
 on the date to which renewed. 
 
 Renewed books are subject to immediate recall. 
 
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 (A9562sl0)476B 
 
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 UtUTcmty of California 
 
 Berkeley 
 

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