Bradford v. Fidelity Trust Co.

• Decision Date: 26 October 1918
• Citation: 12 Del.Ch. 56,104 A. 777
• Court: Court of Chancery of Delaware
• Parties: WILLARD HALL BRADFORD, Administrator d. b. n. c. t. a. of the Will of Junia K. Dwight, Deceased, v. FIDELITY TRUST COMPANY, Executor under the Last Will and Testament of Harriet C. Prevost, Deceased

104 A. 777

12 Del.Ch. 56

WILLARD HALL BRADFORD, Administrator d. b. n. c. t. a. of the Will of Junia K. Dwight, Deceased, v. FIDELITY TRUST COMPANY, Executor under the Last Will and Testament of Harriet C. Prevost, Deceased

Court of Chancery of Delaware, New Castle

October 26, 1918

BILL FOR INSTRUCTIONS by Willard Hall Bradford, administrator d b. n. c. t. a. of the will of Junia K. Dwight, deceased against the Fidelity Trust Company, a corporation of the State of Pennsylvania, executor under the last will and testament of Harriet C. Prevost, deceased. The facts appear in the Chancellor's opinion.

Thomas F. Bayard, for the complainant.

Herbert H. Ward, for the defendant.

OPINION

THE CHANCELLOR.

The bill filed by Willard Hall Bradford, administrator d. b. n c. t. a. of Junia K. Dwight, deceased, for instructions raises the question as to the application of the rule established recently respecting equitable income for a life beneficiary of a trust estate.

By the bill of the representative of the Dwight estate it appears that by item IX of her will the testatrix after giving sundry legacies, gave all the rest of her estate to her executors in trust to keep the estate invested and out of the income or interest to pay certain sums; and by the eleventh paragraph of item IX to pay the balance of the yearly income or interest to her two sisters, Harriet C Prevost and Jane B. Porter, share and share alike, for their joint lives, and upon the death of either to the survivor for life. There was a disposition of the principal of the trust estate after the death of the survivor.

Junia K. Dwight, the testatrix, died May 4, 1915, and letters testamentary were soon thereafter granted to Harriet C. Prevost, the surviving executrix. No account was passed by the executrix, and on March 16, 1917, she was at her own request removed as executrix and Willard Hall Bradford was on the same day appointed administrator d. b. n. c. t. a. of Junia K. Dwight. On April 24, 1917, he passed a first and final account as such administrator and received as trustee under item IX $ 395,667.14. Harriet C. Prevost died on September 17, 1917, and the Fidelity Trust Company, a corporation of the State of Pennsylvania, became executor of her will. Instructions are asked by Willard Hall Bradford, the administrator d. b. n. c. t. a. of Junia K. Dwight with respect to the income applicable under paragraph 11 of item IX.

In the case of Equitable Trust Co. v. Kent, et. al., 11 Del.Ch. 334, 101 A. 875, the rule was established that where a testator gave pecuniary legacies and the residue to a trustee in trust for his widow and son for life, with remainder over, and gave to the executor power to sell real estate; and the executor sold productive and unproductive real and personal estate, collected income consisting of rents, interest and dividends, and paid debts and legacies of the decedent, the life beneficiaries are entitled to have equitable income for the first year after the death of the testator; that said income is to be ascertained by determining what sum, if it had been invested from the death of the testator for one year at the rate of four and one-half per centum per annum would with interest amount to the sum of money received by the trustee, the larger sum being principal for the remainderman and the smaller one income for the life tenant. The rule as to calculating the first year's income for life beneficiaries under a will is limited, of course, to gifts of the residuary estate, or of an undivided part thereof. Theoretically...