109 MASS 258 - Heard v. Eldredge

How this case has been cited

Cited by 31 later decisions — most recently December 1963 · most notably Nirdlinger's Estate (1927), 8 E.H. Smith 179 - McLouth v. . Hunt (1897)

2 federal appellate · 29 state decisions — followed in 11 states

Later decisions citing this case, by decade. The current decade is in progress, and our corpus holds fewer opinions from the most recent years, so the latest bars are undercounted — not a real decline.

Chapman, C. J.

¶1The appellees, as trustees under the will of John W. Trull, became proprietors of twenty-nine shares of stock in the Lewis Wharf Company. Its property consisted of real estate in Boston ; and its income consisted of rents and wharfage. The city authorities took a part of the real estate, by right of eminent domain, for the laying out of Atlantic Avenue ; and have paid the corporation therefor $185,000. The directors have divided $75,000 of this money among the stockholders, and reserved the balance. Mrs. Eldredge, the appellant, contends that this dividend belongs to her as income; but the trustees have treated it as capital, of which she, as tenant for life, is entitled to the income only.

¶2 *260The appellant contends that the dividend is hers, under the rule laid down in Minot v. Paine, 99 Mass. 101, and the subsequent cases of Daland v. Williams, 101 Mass. 571, and Leland v. Hayden, 102 Mass. 542. But those cases are quite unlike this. If the city had taken the whole of the company’s land, it would be plain that they had taken its capital. A dividend of the money received for it would be a dividend of capital, of which the tenant for life ought to have the income only. The taking of a large part of the land makes no substantial difference in principle. It converts a part of the capital from real estate into personal. No difficult or complicated process is necessary to ascertain what elements enter into the dividend. It is clearly a dividend of a part of the capital; and an impartial execution of the trust will not permit it to be taken entirely away from the remaindermen. The tenant for life should have only the income.

¶3The suggestion that the intention of the directors should determine the question whether the dividend is capital or income cannot be correct. They may have had no intention on the subject; and if they had, and if it could be ascertained, it might mislead us. It is more safe to look at the character of the property and the transaction.

¶4As the trustees are authorized by the will to change investments, and are directed to pay the residue of the income to the tenant for life after deducting all proper costs, charges and expenses, the brokerage is properly classed among the expenses, and «barged upon the income.

¶5Decree affirmed.