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Holmes, Trustee v. Hrobon

Court of Appeals of Ohio
Apr 16, 1951
103 N.E.2d 845 (Ohio Ct. App. 1951)

Opinion

No. 4303

Decided April 16, 1951.

Wills — Construction — Declaratory judgment action by testamentary trustee — Intention of testator ascertained from will — Extrinsic evidence admissible — Parol evidence inadmissible to vary natural import of will — Meaning given to ordinary and technical words — Evidence admissible where meaning of will doubtful — Specific legacy created — May be contained in residuary clause — Property named in specific legacies protected — General legacies abate, when — Bequest of specific sum of money payable in monthly amounts — General pecuniary legacy created — General pecuniary legacies payable, when — Recipient of income from trust property — Entitled to same from date of testator's death — Estoppel, acquiescence, and ratification distinguished — Doctrine of estoppel — Purpose of — Not applicable, when — Life tenant and income beneficiary of trust — Estopped to question trustee's authority to make purchases, when — Not estopped to question proper allocation of cost of purchases — Probate Court — Control of testamentary trustee — Authority to award, tax, and apportion costs — Ex parte order without notice to beneficiary — "Costs" construed — Section 10501-22, General Code — Apportionment on basis of benefits received — Discretionary power of appellate court to apportion costs on appeal — "Fiduciary" construed — Section 10506-41, General Code — Embraces testamentary trustee — Testamentary trust construed — Trustee authorized to carry on testator's business — To pay life beneficiary income after deducting expenses, etc. — Items deductible in determining income — Costs of repairs — Taxes — Interest on obligations — Depreciation — Settlement of claims — Operating costs, etc. — Items not deductible — Sums expended for purchase of competing businesses — Real estate — Pecuniary legacies — New machinery and equipment — Premiums on life insurance — "Operating expenses" and "other charges" defined, construed, and limited.

1. The cardinal rule in will construction is to ascertain the intention of the testator from within the four corners of the will, and, although extrinsic evidence is admissible to enable the court, as nearly as possible, to place itself in the position of the testator when he executed the will, the court may not permit parol evidence to vary or contradict the natural import of the testator's words, supply omissions, or resolve apparent ambiguities. Direct evidence as to the intention of the testator or of conversations between the testator and the scrivener who drew the will is not admissible.

2. Ordinary words used in a will are to be given their usual meaning and technical words used are to be given their technical meaning unless it appears from the context of the will that the testator used such words in a different sense, and where the language of the will is plain and reasonably clear the court may not qualify or control it by conjecture because of doubt arising from extraneous evidence; but where there is doubt as to the meaning of the will evidence of testator's family situation, his business and financial circumstances, the nature and extent of his investments, and the natural objects of his testamentary bounty is admissible.

3. A specific legacy may be contained in the residuary clause of a will, and, where the will provides in the residuary clause that the income from a specified business owned by testator be paid to his wife for life, a specific legacy is created.

4. Property which is the subject of specific legacies must be protected, and where property other than that given by specific legacies is insufficient to pay general legacies the latter must abate.

5. A provision in a will, giving to testator's sister the sum of $15,000 "to be paid to her by my * * * executor at the rate of $100 per month; but in the event that my * * * executor or trustee should deem it necessary and convenient to pay to her more than $100 per month, he shall do so," creates a general pecuniary legacy.

6. General pecuniary legacies are not required to be paid until time for settlement of the estate has elapsed.

7. In the absence of a contrary provision in a will, one bequeathed the income from certain property for life is entitled to such income from the date of testator's death.

8. There is a distinction between estoppel, acquiescence, and ratification. Estoppel results from the inducement of another to act to his prejudice; acquiescence embraces, in addition to all the elements of estoppel, assent with full knowledge to the inducing act; ratification is confirmation of the act with full knowledge thereof.

9. The doctrine of estoppel operates to protect a person who has relied on the words or conduct of another from damage which might result from a change of position by reason of such reliance. The doctrine is intended to prevent wrongs to innocent parties and has no application unless the party sought to be estopped has full knowledge of all the involved facts and his rights under the law.

10. A life tenant who is also the income beneficiary of a trust involving the operation of a business and who claims the income resulting from profitable but unauthorized purchases by the trustee of competing businesses and additional machinery and equipment is thereby estopped by application of the "ratification by acceptance of benefits doctrine" from raising any question as to the lack of authorization for such purchases. However, such life tenant and income beneficiary is not estopped to raise the question of the proper allocation of the cost of such purchases whether to income or corpus, or the method employed by the trustee in making charges and giving credit therefor.

11. The purpose of the amendment of Section 10501-22, General Code, effective August 22, 1941, by adding thereto the provision, "unless it is expressly otherwise provided by law, in all actions or proceedings had in the Probate Court, whether ex parte or adverse in character, the court may award and tax costs, and apportion them between the parties, on the same or adverse sides, as it adjudges to be right and equitable," is to confer upon the Probate Court the same power to award and tax costs and apportion them between the parties as is conferred upon the Courts of Common Pleas by Section 11628, General Code.

12. The term, "costs," as used in Section 10501-22, General Code, includes not only court costs, but also other expenses incident to litigation with respect to which the court may make an award and finding. The court should apportion the costs and expenses on the basis of benefits received and in so doing should consider for whose protection the litigation was instituted.

13. On appeal from a judgment of the Probate Court, the Court of Appeals has inherent discretionary power to apportion the costs and expenses of litigation in such manner "as it adjudges to be right and equitable."

14. The word, "fiduciary," as used in Section 10506-41, General Code, which provides for and controls the investment of trust funds, embraces the trustee of a testamentary trust.

15. Although the Probate Court is empowered by Section 10501-53, General Code, to control the conduct of testamentary trustees, an ex parte order of such court, made without notice to the life beneficiary of a testamentary trust, is not binding on the latter.

16. A testator created a trust in the residuary clause of his will which, inter alia, provided: "All the balance of my property * * * I give * * * to my wife * * * in trust * * * for and during her life; hereby directing my said trustee * * * to pay to her * * * all the income after the payment of operating expenses and taxes and other charges from my business at the Atlas Linen Laundry Supply, or any other income that I may have after the payment of the other monthly legacies which I herebefore have set out, with full power granted to my said trustee to lease, transfer, or exchange any * * * property belonging to said trust fund for such prices and upon such terms and conditions as he may deem best * * * with full power to * * * settle and adjust, all claims and demands, in favor of or against the trust estate, upon such terms * * * as he may deem best. * * * I * * * appoint * * * to be the executor and trustee of this, my last will * * * with full * * * authority to conduct and carry on the laundry business now conducted by me, and to do all things necessary or proper in the usual course of said business until such a time as the same can be sold, as a going business, for a price, which * * * is a reasonable value thereof, and with * * * authority to sell * * * any or all of my estate, hereby authorizing * * * my said executor to * * * settle and adjust all claims * * * in favor of or against my estate, and to sell * * * the whole or any part of my * * * property." By codicil it was provided, inter alia: "I further authorize * * * my said trustee * * * to carry on any and all business conducted by me at the time of my decease * * * and to continue the same for such time as * * * in the judgment of the said trustee, shall be for the best interest of my estate * * * but it is my wish that the said trustee continue my linen and laundry business as long as the same may be profitable." Shortly prior to the testator's death he had entered the residential-construction business and on the date of his death, in addition to his laundry business, owned, inter alia, vacant lots, lots on which houses had been erected, and lots upon which the construction of houses was in various stages of completion. The will and codicil were probated, and, some years thereafter, the testamentary trustee instituted an action for declaratory judgment requiring construction of the will. Held:

(a) The term, "taxes," as used in item V of the will, means all taxes of every kind and nature imposed by any public authority.

(b) The words, "operating expenses," as used by the testator mean operating costs recognized as such by the internal revenue department of the United States for income tax purposes and include, inter alia, maintenance of the laundry plant.

(c) The phrase, "other charges," although not limited by the rule of ejusdem generis to items of expense similar to operating expense, must be limited to expenses chargeable to the business when operated within the limits of the power conferred, and includes only expenses of a nonrecurring nature incident to the operation of the laundry business and expenses incident to the operation of the trust.

(d) The term, "income," as used in item V of the will signifies net income of the laundry business and the trust as operated under the will.

(e) A mortgage debt on the laundry plant site, and interest thereon, existing at the time of testator's death should be paid out of personal property and if the personal property is insufficient then out of real property exclusive of the laundry business assets. If such assets are insufficient, the laundry business should be charged with liquidation of the debt.

(f) The testamentary trustee may not, in the absence of express authority in the will, test his managerial skill and business ingenuity by indulging in an expansion program requiring use of income, properly payable to the life tenant, for the purchase of competing businesses, which may or may not prove profitable.

(g) Where the testamentary trustee makes unauthorized but profitable purchases of competing businesses and additional machinery and equipment, and the life tenant who is the income beneficiary is, by reason of claiming the income resulting from the expanded business, estopped from questioning such unauthorized purchases but is not estopped to raise the question of proper allocation of the cost of such purchases, the physical assets purchased, such as trucks, machinery, etc., should be charged to corpus and depreciated over the years of their useful life; the income payable to the life tenant to be impressed with an annual depreciation charge. The difference between the value of such physical assets and the purchase price paid therefor constitutes goodwill and is properly chargeable to corpus.

(h) Although such testamentary trustee is not authorized to make additions to the laundry business, he may replace old, worn-out machinery and equipment with modern and efficient machinery and equipment, and, where such replacement machinery and equipment are purchased, their cost should be charged to corpus and an annual depreciation charge made against income.

(i) Such testamentary trustee is not authorized to purchase additional real estate upon which to erect a garage and repair shop in connection with the laundry business, and, where such realty is purchased and plans for such building paid for, such expenditures should be charged to corpus and no annual charge for depreciation made.

(j) Real and personal property taxes accruing after the opening date of the accounting of the executor-trustee constitute proper charges against the trust estate.

(k) A mortgage debt incurred by the trustee for the purpose of completing construction of houses on lots owned by testator so as to enable liquidation of such property is properly payable out of proceeds derived from the sale of such property.

(l) Interest on obligations incurred by testator during his lifetime is payable out of corpus of the estate other than the laundry business, first, out of personalty, and, second, from realty.

(m) A mortgage debt and interest accrued thereon as of the date of testator's death are chargeable, first, against personal property, second, against real estate, and, finally, against the laundry business if other assets are insufficient.

(n) Profits derived from the sale of real estate involved in testator's construction business accrue to the corpus of the trust, and any money derived from the sale of such property and placed in the laundry business must be withdrawn therefrom, segregated, and used, first, for the payment of debts and expenses of administration, and, finally, for payment of pecuniary legacies which by the will are made a charge on the estate and its income other than the laundry business.

(o) In the absence of a provision in the will authorizing it, a testamentary trustee may not purchase insurance on his life for the benefit of the trust or its beneficiaries, and, where the trust provides that income is to be paid to a named beneficiary, such trustee is not authorized to purchase insurance on his own life by Section 10506-41, General Code, which controls investments by trustees.

(p) Under the testamentary authorization to carry on testator's laundry business and pay to his widow all "income" after payment of "operating expenses," "taxes" and "other charges," the testamentary trustee, in determining income, is authorized, inter alia, to deduct all taxes of every kind and nature imposed by any public authority; to deduct the cost of linens which are worn out within a few months after being removed from stock and placed in use; to deduct the expense incurred in connection with the replacement of a boiler which had been destroyed while being used in the laundry business; to deduct interest on obligations incurred in the operation of the laundry business after the death of testator; to deduct an aliquot part of the cost of capital assets as a yearly depreciation charge; to deduct the cost of repairs to machinery, equipment and buildings; to deduct the amount expended in the settlement of a claim of a claimant having an interest in the laundry business; to deduct the amount of money derived from the sale of properties involved in testator's construction business and used in the laundry business; and, in general, to deduct all operating costs recognized by the internal revenue department of the United States for income tax purposes.

(q) Under such testamentary authorization, the trustee, in determining "income," is not authorized to deduct sums expended for the purchase of competing businesses, the cost of real estate purchased upon which it was proposed to erect a garage and repair shop to be operated in connection with the laundry business and plans for such structure, the amount of pecuniary legacies to testator's sisters and brother, the cost of new machinery and equipment necessary for replacement, or premiums paid on a policy of insurance on the trustee's life.

APPEAL: Court of Appeals for Franklin county.

Mr. John H. Summers, for plaintiff appellee.

Messrs. Herbert Dombey, Mr. Edwin F. Tuttle, Messrs. Pickrel, Schaeffer Ebeling and Messrs. Morley, Stickle, Keeley Murphy, for defendant appellant.

Messrs. Wright, Harlor, Purpus, Morris Arnold, for defendant appellees.


This is an appeal on questions of law and fact from a judgment of the Probate Court of Franklin County. The matter is presented to this court on the motions of the trustee and legatees to confirm the report of the referee appointed by this court, and on the motion of the life tenant to vacate and set aside the report of the referee and grant a new trial. The principal ground of the motion of the life tenant is that the report is not sustained by sufficient evidence and is contrary to law.

Part I

This action for a declaratory judgment was instituted October 3, 1946, by Harry B. Holmes, trustee of the trust created in the will of Clay M. Thomas, deceased. The widow and life tenant, Mae Thomas, who has since remarried and is now Mae Thomas Hrobon, and the legatees, Clara J. Thomas Mann, Millie K. Thomas Watson, and Ray G. Thomas, the sisters and brother of the testator, and a legatee, Margaret Cassidy, are all named parties defendant. All parties are represented by counsel.

The trustee propounded 14 questions which require a construction of the will and a determination of certain issues which arose in the conduct of the trust, an accounting between the trustee and the life tenant, and a determination as to what constitutes corpus and what constitutes income.

The legatees filed an answer in which they joined in the prayer for relief sought in the amended petition filed by the trustee. The life tenant, Mae Thomas Hrobon, in her answer denies various allegations in the trustee's amended petition, makes certain allegations, by way of affirmative relief asks the court to instruct the trustee in respect to eight questions therein set forth and joins in the prayer of the trustee for the judgment and direction of the court in regard to construction of the will and the duties of the trustee in the premises.

The Probate Court appointed a special master commissioner to take the testimony. Seven volumes of testimony and hundreds of exhibits were submitted at the hearing, which extended over a period of many weeks. The special master commissioner submitted his report, which contains a finding of facts and conclusions of law. A judge of the Common Pleas Court of Franklin County was appointed acting probate judge to determine the matter. Judgment was rendered in the Probate Court in April 1949. Notice of appeal on questions of law and fact was filed by the life tenant, Mae Thomas Hrobon. Counsel for all parties stipulated that the matter on appeal should be heard and considered by this court on the record taken in the Probate Court. This court appointed a referee to consider the matter and his report was filed on January 2, 1951. To this report were filed the motions which are presently before this court.

A competent and reliable firm of accountants was selected by the trustee to make a complete audit of his administration as executor of the estate of Clay M. Thomas and as trustee of the trust created by the testator. The report of the accountants covers the period from May 1, 1938, to August 31, 1946. The opening date of the accounting, May 1, 1938, was 16 days after the date of the death of the testator, which occurred on April 14, 1938, and one month prior to the date of the appointment of Harry B. Holmes as executor, which appointment occurred on June 1, 1938. The closing date of the accounting of the executor was December 31, 1938. The closing date of the accounting of the trustee, August 31, 1946, was approximately one month prior to the date on which the trustee instituted this action in the Probate Court. No accounting has been submitted to the court by the accountants for the period subsequent to August 31, 1946, although some testimony was taken relative to certain transactions occurring at a later date. The report of the accountants consists of 196 pages in the form of a bound volume which contains 21 separate exhibits and 45 separate schedules. This report is referred to as plaintiff's exhibit X and gives a detailed statement of the receipts and disbursements of the executor and trustee, the various appraisals of estate assets, income received and disbursed, real estate transactions conducted by the executor and trustee, the corpus of the trust, income disbursed to the life tenant, purchases and expenditures made by the trustee in the operation of a laundry, adjustments of the trustee's accounting to conform to what the accountant considered to be good accounting practice and other related matters.

Part II

On January 23, 1937, Clay M. Thomas, a resident of Columbus, executed his last will and testament, the pertinent parts being as follows:

"Item I. I direct that all my just debts and funeral expenses be paid out of my estate as soon as practicable after the time of my decease.

"Item II. I give and bequeath to my sister, Clara J. Thomas Mann, the sum of $15,000, the same to be paid to her by my said executor and trustee at the rate of $100 per month; but in the event that my said executor or trustee should deem it necessary and convenient to pay to her more than $100 per month, he shall so do.

"Item III. I give and bequeath to my sister, Millie K. Thomas Watson, the sum of $15,000, the same to be paid to her by my said executor and trustee at the rate of $100 per month; but in the event that my said executor or trustee should deem it necessary and convenient to pay to her more than $100 per month, he shall so do.

"Item IV. I give and bequeath to my brother, Ray G. Thomas, the sum of $15,000, the same to be paid to him by my said executor and trustee at the rate of $100 per month; but in the event that my said executor or trustee should deem it necessary and convenient to pay to him more than $100 per month, he shall so do.

"It is my wish that my said trustee, Harry B. Holmes, or his successor in the trust, shall hold, manage and control the bequests hereinbefore made in items 2, 3, and 4, and that my said executor and trustee shall invest the said funds in government bonds or other securities of like nature as my trustee in his discretion may deem best, with the full power to pay to my sisters and brother the sum of $100 per month, to be applied on the amount of the bequests, and to pay such a sum over and above the $100 herein stipulated as in the discretion of my trustee may be necessary to provide a comfortable living for my said legatees hereinbefore referred to.

"In the event of the death of any of the legatees hereinbefore referred to, then his or her share shall be equally divided among my surviving sisters or brothers, or any of them, share and share alike.

"And in the event of the death of all of my sisters and brothers before my death, then it is my will that their shares shall revert to my wife.

"Item V. All the balance of my property, both real and personal, of every kind and description, wheresoever situated, which I may own or have the right to dispose of at the time of my decease, I give, bequeath and devise to my wife, Mae Thomas, in trust, for the benefit and the use of my wife, for and during her life; hereby directing my said trustee, Harry B. Holmes, to pay to her for her use and benefit all the income after the payment of operating expenses and taxes and other charges from my business at the Atlas Linen Laundry Supply, or any other income that I may have after the payment of the other monthly legacies which I herebefore have set out, with full power granted to my said trustee to lease, transfer, or exchange any securities and property belonging to said trust fund for such prices and upon such terms and conditions as he may deem best, and for the best interests of my wife; to execute and deliver any proxies, powers of attorney, or agreements that the trustee may deem necessary or advisable in administering this trust; and also with full power to compound, compromise, settle and adjust, all claims and demands, in favor of or against the trust estate, upon such terms and conditions as he may deem best. Upon the death of my said wife, the said trust as herein created shall cease, and the trustee or his successor shall convey and transfer to my legal heirs the balance of the said property, share and share alike, at the time of the death of my said wife.

"Item VI. I make, nominate, and appoint my attorney, Harry B. Holmes, of Columbus, Ohio, to be the executor and trustee of this, my last will and testament, with full power and authority to conduct and carry on the laundry business now conducted by me, and to do all things necessary or proper in the usual course of said business until such a time as the same can be sold, as a going business, for a price, which, in the opinion of my said executor, and in the opinion of my said wife, Mae Thomas, is a reasonable value thereof, and with full power and authority to sell and dispose of any or all of my estate, hereby authorizing and empowering my said executor to compound, compromise, settle and adjust all claims and demands in favor of or against my estate, and to sell, at private or public sale, at such prices, and upon such terms of credit or otherwise, as he may deem best, the whole or any part of my real or personal property, and to execute, acknowledge, and deliver deeds and other proper instruments of conveyance thereof to the purchaser or purchasers. No purchaser from my said executor need see to the application of the purchase money to or for the purposes of the trust, but the receipt of my executor or trustee shall be a complete discharge and acquittance therefor."

On April 12, 1938, the testator executed a codicil to his will, the pertinent parts being as follows:

"I, Clay M. Thomas, of the City of Columbus, County of Franklin, and State of Ohio, do make, publish and declare this codicil to my last will and testament.

"I hereby add the following, to be deemed and taken as if originally inserted in said will, I give and bequeath to Margaret Cassady, of Columbus, Ohio, the sum of ten thousand ($10,000) dollars, payable in monthly installments of one hundred ($100) dollars each, and the payment of the same is hereby made a charge upon my business, which is known as the Atlas Linen, Laundry Supply, and located on Grant avenue, Columbus, Ohio; and that the unpaid balance of the ten thousand ($10,000) dollars is to draw interest at five per cent, the same to be included in the one hundred ($100) dollar monthly payments until the full sum of ten thousand ($10,000) dollars together with interest is fully paid to the said Margaret Cassidy. This bequest is made in consideration of services and money advanced to me for the business by the said Margaret Cassidy, and I hereby instruct my said trustee, Harry B. Holmes, to pay to the said Margaret Cassidy the sum of one hundred ($100) dollars per month until the full settlement of ten thousand ($10,000) dollars and interest is fully paid.

"I further authorize and empower my said trustee, Harry B. Holmes, in the exercise of his discretion, to carry on any and all business conducted by me at the time of my decease, or in which I may then be interested, whether alone or in partnership with others, and to continue the same for such time as, as in the judgment of the said trustee, shall be for the best interest of my estate, and to extend or renew any such relationships, or to terminate, as the trustee shall think fit, but it is my wish that the said trustee continue my linen and laundry business as long as the same may be profitable.

"I hereby ratify and confirm my said will in all other respects."

The will and codicil were duly probated. The widow, Mae Thomas (now Mae Thomas Hrobon), elected to take under the will. Harry B. Holmes was duly appointed executor and later trustee, and he is still acting as trustee.

Part III.

The cardinal rule to follow in will construction is to ascertain the intention of the testator. This intention is to be determined from the words used in the will and codicil construed from the four corners. Extrinsic evidence is admissible for the purpose of assisting the court in determining the intention of the testator. We recognize the established rule that the court may admit extrinsic evidence in an effort to place the court, as nearly as possible, in the position of the testator when he executed his will. Evidence of his family situation, business and financial circumstances, the nature and extent of his investments, and the natural objects of his bounty is admissible, where there is some doubt as to the meaning of the will. 41 Ohio Jurisprudence, 624, 630, Sections 491, 499, and cases there cited. With this evidence the court is better able to see things as the testator saw them and to construe the words used in the will as he understood them and to give that construction which was intended. But from the evidence adduced the court cannot allow the natural import of the words used to be varied or contradicted, or permit omissions to be supplied or apparent ambiguities to be removed by parol evidence. 41 Ohio Jurisprudence, 609, Section 447, and cases there cited. Direct evidence as to the intention of the testator or as to conversations between the testator and the scrivener is not generally admissible. Under the circumstances in this case, conversations between the testator and Harry B. Holmes, the scrivener, were not admissible. 41 Ohio Jurisprudence, 635, Section 505, and cases there cited.

It is well settled that words used in a will are to be given their ordinary meaning unless it appears from the context that the testator intended to use them in a different sense. While grammatical accuracy need not be observed and more consideration is paid to substance than form, the construction of words used by the testator and the arrangement of sentences and the punctuation sometimes do become important. 41 Ohio Jurisprudence, 638, Sections 508, 509, and cases there cited. Technical words used in a will should be given their technical meaning unless it appears that the testator used them in some other and different sense. 41 Ohio Jurisprudence, 642, Section 512, and cases there cited. In construing the will, the court should make every effort to give effect to every provision and to reconcile any apparent inconsistency.

There is no fixed rule applicable to the construction of wills. All rules of construction are useful or applicable only so far as they aid in arriving at the correct interpretation as to the intention of the testator. 41 Ohio Jurisprudence, 575, 576, Section 456, and cases there cited. If the language of the will is plain and reasonably clear the court cannot qualify or control the language by conjecture or doubt arising from extraneous evidence. 41 Ohio Jurisprudence, 599, Section 468, and cases there cited.

Part IV.

The referee found from the evidence that Clay M. Thomas and Mae Thomas, upon his return from service in World War I, founded a linen supply business in a building at the rear of the Thomas home property on Hunter avenue, Columbus, Ohio. The business grew, and in the year 1922 they moved to Maple street. Within a year or two Thomas purchased land on Grant avenue just south of Spring street in Columbus, on the rear of which he constructed a two-story building and a boiler room. The following year a two-story addition was put on the front of the same lot. Between 1929 and 1931 a four-story building with a boiler room was constructed in the rear. These buildings on Grant avenue, as erected through the years 1929 and 1931, comprise the present structures of the Atlas Linen, Laundry Supply. In the beginning the principal business of the Atlas Linen, Laundry Supply was linen and towel supply. Thomas bought napkins, towels, aprons, sheets, tablecloths, barber towels and other similar items for the purpose of renting them to barber shops, hotels, clubs, restaurants, doctors, dentists and other business institutions. These items were processed by washing and cleaning. To always have a fresh supply in the hands of the customer on a rental basis was the particular service of the linen supply business. In 1926 the business had progressed to a point where laundry processing was started. Thomas cleaned and washed wearing and household apparel which belonged to the customer. In the meantime, industrial supply work was added. Thomas cleaned and washed uniforms, overalls and other work clothing used in such places as garages, factories and industrial workshops, these garments, in the main, being owned by Thomas. In 1934 he began manufacturing garments used in his industrial supply business, and for that purpose organized the Atlas Garment Company. In 1936 Thomas purchased lots in the city of Columbus and the village of Upper Arlington and started to build houses thereon. He organized Clay M. Thomas, Inc., through which agency his construction work was conducted. On the date of his death, April 14, 1938, Thomas was operating the Atlas Linen, Laundry Supply, which at that time included the Atlas Garment Company and Clay M. Thomas, Inc.

The May 1, 1938, opening entry in the records of the executor shows that on the date of the testator's death his total assets were valued at $269,714.76. The assets are listed as follows:

Cash . . . . . . . . . . . . . . . . . . $ 11,479.83 Accounts receivable . . . . . . . . . . . 7,386.81 Inventories . . . . . . . . . . . . . . . 20,847.16 Investments (including real estate) . . . 156,209.69 Property and assets of laundry . . . . . 73,191.27 Money advances . . . . . . . . . . . . . . 600.00

His liabilities, amounting to $226,412.57, are listed as follows:

Accounts payable . . . . . . . . . . . . $ 19,071.12 Check payable . . . . . . . . . . . . . . 5,000.00 Deposits on linen rentals . . . . . . . . 422.99 Mortgages payable . . . . . . . . . . . . 114,581.00 Accrued liabilities . . . . . . . . . . . 22,337.46 Allowance for widow's support . . . . . . 10,000.00 Legacies payable . . . . . . . . . . . . . 55,000.00

Exclusive of the legacies, the liabilities amount to $171,412.57. The difference between assets and liabilities of the testator at death was $98,302.19. The net estate as listed for the determination of inheritance tax was $89,764.90. The federal estate tax appraisal increased the value of real estate $61,410.

The total net income derived from rental property is as follows:

1938 (May 1 thru December 31) . . . . . . $ 701.89 1939 . . . . . . . . . . . . . . . . . . 1,008.83 1940 . . . . . . . . . . . . . . . . . . 2,710.61 1941 . . . . . . . . . . . . . . . . . . 1,961.79 1942 . . . . . . . . . . . . . . . . . . 1,124.33 1943 . . . . . . . . . . . . . . . . . . 1,508.08 1944 . . . . . . . . . . . . . . . . . . 1,123.48 1945 . . . . . . . . . . . . . . . . . . 881.77

A short time prior to his death the testator entered the residental construction business. He purchased 50 lots in Upper Arlington for the purpose of constructing residences thereon for sale. On the date of his death he still owned 36 lots, on eight of which residences had been completed and were ready for sale. On a number of other lots houses had been started and were under construction. It was the value of this real estate which was increased by the federal estate tax appraisal.

This court finds from the record that no children were born to Clay M. Thomas and Mae Thomas. His next of kin at the time of his death, and at the present time, consists of two sisters and a brother who, if living at the death of the life tenant, will receive the balance of the trust estate as his "legal heirs." The two sisters and brother are contingent remaindermen. The class of legal heirs cannot be ascertained until the death of the life tenant.

For the purpose of brevity and clarity the plaintiff-appellee is herein referred to as trustee; the defendant-appellant, Mae Thomas Hrobon, the widow, is referred to as the life tenant; the sisters and brother are referred to as legatees; and the unknown legal heirs, as remaindermen.

We do not deem it necessary or practical to discuss or even state all the conflicting claims of the parties or to discuss or even cite all the numerous authorities cited in the briefs of counsel. To do so would unduly and unnecessarily extend this opinion.

Part V.

Rather than construe the will generally and then answer the questions propounded specifically, which would involve repetition, we now take up the questions propounded by the parties, and in the interest of clarity we follow the same order as did the referee.

Trustee's Question No. 1: "What is the meaning of the term `income' as used by the testator in his will as the same appears in item V of the will and codicil thereto?"

The referee held that income payable to the life tenant should be arrived at by computing the gross income from the operation of the Atlas laundry business and other income producing properties of the decedent and deducting therefrom all operating costs recognized by the internal revenue department of the United States for income tax purposes and all taxes of every kind and nature imposed by any public authority whatever. The referee held further that in the operating costs of the Atlas laundry business there should be included maintenance, expansion necessary to keep pace with the increase or progress and continued operation of the business of the plant, the cost of the management of the trust, including the trustee's compensation, court costs, fees of counsel necessarily incurred in the administration of the trust and the interpretation of the will, expenses occasioned by litigation and other charges incurred under the supervision and control of the court, and the monthly legacy payments to Mann, Watson, Thomas and Cassidy, until those legacies had been fully discharged. We disagree with the referee with respect to those portions of the finding which are italicized.

In item V, the will gives all the income from "all the balance of my property" to Mae Thomas for life, and with respect to the income from the laundry business defines income as "all the income after the payment of operating expenses and taxes and other charges from my business at the Atlas Linen, Laundry Supply." The testator then provided that his wife shall receive "any other income that I may have after the payment of the other monthly legacies which I herebefore have set out."

With respect to income from property of the trust other than the laundry business, such income is the "net income" after the payment of costs and expenses incident to the administration of the trust, including taxes and other proper charges which are recognized by the federal income tax authorities, and which may reasonably be allocated to this part of the income of the trust. On the net income derived from property other than the laundry business, the legacies payable to Mann, Watson and Thomas are definitely made a charge. The life tenant cannot receive any income from this portion of the trust property until these three legacies are paid in full. For this purpose it will be necessary to make a segregation of income.

The term, "income," as it relates to the income from the laundry business, is more difficult to define, and the ascertainment of what constitutes such income is the principal question for determination by this court. The parties in this proceeding have used the terms, "gross income," "net income," and "distributable income." In item V of the will the testator provided that the life tenant shall receive the income from the business "after the payment of operating expenses and taxes and other charges from my business at the Atlas Linen, Laundry Supply." The meaning of the term, "income," is arrived at by determining what deductions may properly be taken from the gross income of the laundry business. The testator stated that operating expenses may be deducted. We accept and approve the finding of the referee that operating expenses embrace those expenses rcognized by the internal revenue department of the United States for income tax purposes, including maintenance of the plant.

The testator also provided that taxes should be deducted. We approve the finding of the referee that all taxes of every kind and nature imposed by any public authority should be deducted.

The question propounded cannot be answered fully without considering the words of the testator to the effect that from the income should be deducted not only operating expenses and taxes, but also "other charges." This matter is treated by the referee in the answer to trustee's question number two which is as follows:

"What is the meaning of the clause `operating expenses and taxes and other charges from my business at the Atlas Linen, Laundry Supply' as the same appears in item V of the testator's will; and what sums, if any, expended by the trustee in that business may not be charged to `income'?"

Questions numbered two, three and seven propounded by the life tenant raise the same issues as are raised by the trustee in his question number two.

The referee answered the trustee's question numbered two by concluding that these words used in item V of testator's will mean "operating costs, recognized by the internal revenue department of the United States for income tax purposes; all taxes of every kind and nature imposed by any public authority: all costs for Atlas plant maintenance and management, and business expansion necessary to keep pace with the increase or progress and continued operation of the business, including the costs of linens in use known as `float,' the cost of businesses purchased, new machinery, repairs to machinery, equipment and laundry property, and such other costs and charges as the trustee, in his discretion, as a prudent business man, might deem necessary for the continued profitable operation of the Atlas plant; and administrative costs including expenses incident to litigation." We disagree with the referee with respect to those portions of the finding which are italicized.

The words in the will, the meaning of which is in dispute, are, "other charges." The life tenant contends that the rule of ejusdem generis applies, restricting the meaning of the term to items of expense similar to operating expenses and taxes. We do not believe that the testator intended to give these words such a restricted meaning.

The trustee and remaindermen contend that the words, "other charges," should be given a broad meaning because of the broad powers conferred on the trustee. Attention is called to the provision in item VI of the will wherein the testator gave to the trustee "full power and authority to conduct and carry on the laundry business now conducted by me, and to do all things necessary or proper in the usual course of said business until such a time as the same can be sold," and, also, the provision in the codicil wherein the testator provides, "I further authorize and empower my said trustee, Harry B. Holmes, in the exercise of his discretion, to carry on any and all businesses conducted by me at the time of my decease * * * but it is my wish that the said trustee continue my linen and laundry business as long as the same may be profitable." The trustee and the remaindermen contend, and the referee found, that the powers thus conferred authorized the trustee to conduct the laundry business in the same manner as if it were his own enterprise. It is asserted that the trustee, by the provisions of the will and codicil, was given sufficient power and authority to authorize the use of his discretion and best judgment in determining whether any of the income from the business should be used for expansion purposes, such as purchasing competing businesses and additional land and machinery for such expanded business, in order that the laundry business "may be profitable." In other words, under the trustee's interpretation of the will, with which the referee agreed, it was the intention of the testator that the trustee be empowered to do anything necessary to operate the business successfully. We do not agree. The testator had in mind that the trustee might not be able to operate the laundry business profitably and, therefore, provided for its sale.

We recognize that in operating a business such as a laundry it was advisable to confer wide discretionary powers on the trustee to determine whether a certain given expense, such as money expended for the purchase of competing businesses and for additional land and machinery for the operation of the expanded business, would be for the best interests of the trust. However, unless the provisions of the will expressly provide that the trustee shall have such wide discretionary power to take income which would otherwise be distributed to the life tenant and use it for such purpose, the trustee has no authority to make such expenditures. Authority to operate does not confer power on the trustee to allocate to the income the costs of replacements and additions to the detriment of the life tenant and benefit of the remaindermen.

After giving consideration to all the provisions of the will and codicil we find that a scheme was devised by the testator for the liquidation and settlement of his estate and the continuation of his business for the purpose of providing an income for his widow during her natural life. It appears that she was the primary object of his bounty. We find no provision in the will which permits a construction that it was the intention of the testator that the trustee, in the operation of the laundry business, could deprive the life tenant of a portion of her income in order to expand the business and thereby increase the corpus at her expense. The testator is charged with the knowledge that the trustee must protect and defend the corpus as against the life tenant and, likewise, must protect and defend the income of the life tenant and make distribution to her of all income to which she is entitled, and that no part of the income of the life tenant may be taken to increase the corpus. 2 Scott on Trusts, 1257, Section 232.

In item VI of the will the testator did not confer power on the trustee to take the income of the life tenant for the purpose of buying competing businesses and additional assets which would become a part of the corpus, by conferring on the trustee "full power and authority to conduct and carry on the laundry business now conducted by me, and to do all things necessary or proper in the usual course of said business until such a time as the same can be sold." These words confer full power and authority on the trustee to carry on the laundry business as he received it in the trust; and, in the operation of the business as he received it, he was given full power and authority "to do all things necessary or proper in the conduct of said business" having in mind that he must serve with equal devotion the rights of the remaindermen and the life tenant. In our opinion the expression, "other charges," must be limited to charges or expenses chargeable to the business when operated within the limits of the powers conferred upon the trustee.

To the claim that the testator intended the term, "other charges," to include only the expenses of administering the trust, such as trustee's compensation, counsel fees, cost of bond and other costs such as court costs, etc., the trustee and remaindermen assert that these expenses are determined under the law and that, therefore, the testator must have attached some other significance to these words. It is claimed that in determining net income from a business, operating costs and taxes are always deducted and by the same process of reasoning that the testator must have intended, in the use of these words, to give this expression an additional significance. We do not believe that this reasoning is sound. In our opinion the testator intended to give the words, "operating expenses," "taxes," and, "other charges," the ordinary and primary meaning of the words. It appears that the term, "other charges," is a catchall and intended to include expenses of administering the trust and, also, expenses of a nonrecurring nature incident to the ordinary operation of the business under the trust which expenses would not properly fall in the category of operating expenses and taxes. See Morris v. Harris, 19 Ohio St. 15, 19. The accountant listed separately nonrecurring expenses.

In the use of the words, "other charges," the testator did not intend to include the payment of the three legacies mentioned in items II, III and IV of the will. To so interpret the will would require the court to rewrite it and make the payment of these three legacies a charge on the income from the laundry, whereas, the testator definitely made these legacies a charge on income from property in the trust other than the laundry business.

We conclude that the word, income, as used by the testator in item V of the will, means net income of the business and the trust as operated under the will. We do not use the term, net income, in a technical sense. Rather, we use this term to designate income resulting from the operation of the business and the trust, which is "ascertained by subtracting expenditures allocable to income from receipts allocable to income." 2 Scott on Trusts, 1258, Section 233; 1 Restatement of the Law of Trusts, 681, Section 233.

We do not use the term, net income, in the same technical sense as it is used by the internal revenue department, although it is the opinion of this court that had the trustee made only such expenditures as are permitted under the will, the net income to which the life tenant was entitled in any current year would have closely approximated the net income as determined by the internal revenue department.

From the net income must be deducted the payments on the Cassidy legacy. The referee used the term, "distributable income," to designate the amount which is finally payable to the life tenant. We find no objection to the use of this term. The particular term used is not important. The important thing is the method employed to arrive at the amount finally payable to the life tenant.

We now apply the principle herein announced to several controversial matters in which the trustee expended from the income substantial sums of money in the conduct of the laundry business.

a. Cost of Linens — Float.

The referee found that "float" is a term used to denote linens and garments in use, that is, in the hands of customers, in trucks, and being laundered at the plant. The life of such linens and garments, according to the evidence, is considerably less than one year. The referee properly found from the evidence that float is expensed as soon as it is put into use, and that it appears as an operating expense on the statement of income. The referee also found that the testator in the operation of the laundry business and in his income tax returns followed the policy of expensing float as of the date it went into use, and that the trustee upon assuming charge of the trust followed the same policy. To be more specific, the trustee charged cost of linen, linen equipment and industrial supplies to expense at the time such items were removed from stock and put into service. The evidence shows that float is 100 per cent depreciated within a couple of months after being put into use.

The referee found that the trustee, in removing float from the inventory account and expensing it as an operating cost, adopted the method of accounting recognized and approved by the Bureau of Internal Revenue, the accounting profession, and the method recognized and approved by the testator.

The increase in the value of material in stock, and also the material in use, known as float, was largely due to the persistent effort on the part of the trustee to expand the business and particularly to the purchase of competing businesses. By purchasing competing businesses a corresponding expansion in the Atlas business resulted, and this is reflected in receipts and disbursements as well as in inventory values of material in stock. The total inventory value of the linen and industrial division of the laundry business on May 1, 1938, was $13,996.44. This amount was greatly increased during the years 1939, 1940, 1941, 1942 and 1943. There was a substantial decrease in 1944. However, in 1945 there was a substantial increase so that the inventory value at the end of that year was $42,042.71. It was in 1945 that the trustee purchased two competing businesses and paid therefor $100,000 out of income. In August 1946 the inventory value of this material was $93,783.43. Therefore, it is obvious that the purchase of competing businesses, which will be treated later under an additional heading, resulted in the expansion of the business and necessitated the purchase of additional machinery, trucks, and supplies, and resulted in a tremendous increase in the amount and value of float.

The yearly cost of the material which was put into float was tremendously increased in each succeeding year. From May 1, 1938, to December 31, 1938, expenditures for such material totalled $39,897.53. For the entire year of 1939 such expenditures were $61,955.43. During each succeeding year an increased amount was expended so that in 1944 the sum of $190,041.84 was thus expended. From January 1, 1946, to August 31, 1946, there was thus expended $199,289.70, or a total for the period from May 1, 1938, to August 31, 1946, of $1,142,494.40. All of the cost of float was paid from income.

It is the contention of the trustee and the legatees that the life tenant was the direct beneficiary of this expansion of business and this manner of operation, for the reason that her income increased correspondingly each succeeding year. The life tenant contends that since the material in stock and float have been tremendously increased in value a credit should be given her at this time for the increased inventory value of the material on hand and for float over and above the inventory value for such material and float at the beginning of the trust. If this were done the effect would be to permit the life tenant to receive the income from the use of float in the business and, also, a credit for the estimated value of float at the end of the accounting period. We cannot accept this view of the matter, since it is a fact that the linens are totally consumed and depreciated within a few months after being taken out of stock and put into use, and that it is the accepted practice to expense linens as soon as such material is taken from stock and put into use.

The life tenant has received and now claims the income derived from the use of float in the business. In order to keep the business operating on a high level of income, the trustee must annually expend large sums for material which goes into stock. The purchase of such material is properly charged to income. The increased cost of material going into stock in turn produces an increase in net income distributable to the life tenant.

We are in accord with the contention of the life tenant to the extent that the trustee should not be permitted to gradually build up the inventory of such material during the conduct of the trust and charge it to income and at the termination of the trust regard such material in inventory and float as corpus. In respect to float, we fail to find any injustice resulting to the life tenant during the continuation of the trust. It is upon the termination of the trust that an adjustment must be made, otherwise the remaindermen would be unjustly enriched at the expense of the life tenant. Then, too, in the event of the sale of the business, material in inventory and in float would he substantial items in determining the value of the business. It is at that juncture in the relationship of the parties that an adjustment will be required.

The formula used by the Ohio Department of Taxation, Intangible Tax Division, seems to be fair and just. For the purpose of determining the value of material in stock and in float, i. e., in use, the Department of Taxation takes the value of the inventory at the beginning of the year and adds to it the cost of all purchases made during the year and subtracts from this total the value of the inventory at the end of the year. Seventy per cent of this figure would be the fair value of material in stock and in use at the end of the year. This formula was adopted by the Department of Taxation after much research and after the matter had been given intensive study. Since the date on which the trust will be terminated, or the business sold, is unknown and uncertain, the court instructs the trustee to set up the books and apply the formula above stated so that at the close of each accounting period the rights of the life tenant and remaindermen will be reflected in material in inventory and in use. Upon the termination of the trust or in event of sale of the business, by applying this formula, we arrive at a figure which will represent the value of material in stock and in float at that date, over and above the value of material in stock and in float at the beginning of the trust, from which the life tenant will no longer derive any use or benefit by way of income. This figure at the end, whatever it may be, will be credited to income and not corpus.

b. Expansion — Businesses Purchased.

The referee found from the record that from January 18, 1940, to and including May 19, 1945, the trustee purchased five similar competing businesses. The total costs of purchase of the several businesses were paid out of the gross income of the trust. The trustee contends that, since the will placed no limitation upon the trustee respecting the purchase of new businesses, he may do so. This court holds to the proposition that the trustee has not the power to purchase new businesses unless the will expressly conferred such power on him. Full power and authority to conduct and carry on the laundry business and "to do all things necessary or proper in the usual course of said business," which was the power conferred on the trustee by the will, does not authorize him to purchase new businesses. To do "all things necessary" means to do all things necessary as trustee and not as sole proprietor. The direction to the trustee in the codicil to continue the business "as long as the same may be profitable" does not authorize the trustee to do anything and everything to make the business profitable, as he could do if it were operated by him as sole proprietor. The trustee does not have authority conferred on him to conduct the business as a private individual might conduct it in order to make the business profitable. A private individual may use income to expand at will; a trustee may not, unless authority is clearly given.

But it is claimed that the life tenant consented to the purchase of other businesses by the trustee. The record does not show that the trustee discussed with the life tenant the purchase of the first three businesses. The record does show that a conference took place between the trustee and the life tenant respecting the purchase of The 5c Towel Supply Company and the Bowden Towel Supply Company. The trustee testified that the life tenant said, "I think that will be all right." The life tenant testified that in response she said, "I told him I didn't know." She further testified that he did not advise or consult with her or give her any information relative to these two businesses. However, it does appear that an application was filed in the Probate Court by the trustee to purchase The 5c Towel Supply Company and the Bowden Towel Supply Company. The court in an ex parte order granted the application. The life tenant had no notice and such order would not be binding on her.

The referee accepted the testimony of the trustee on this issue and disbelieved the testimony of the life tenant. On the basis of the testimony of the trustee there is no showing that the life tenant gave her approval of the purchase of such businesses and of the charging of the cost to income. The trustee does not claim that the matter of the allocation of the cost was discussed with the life tenant. The record is silent on this matter. Then, too, the matter of purchasing competing businesses concerns not only the life tenant but the remaindermen as well.

It is claimed that the life tenant should not be heard to object inasmuch as her income has been greatly increased by such purchases. Whether the trustee has exceeded his powers is not determined by the success or failure of the venture. Fortunately in this case the trustee has shown a genius in the operation and conduct of a laundry business and has been exceedingly successful. It might have been otherwise. A trustee is not permitted to test his managerial skill and business ingenuity by embarking on a venture of expansion which requires the use of income of the life tenant in the purchase of competing businesses which may or may not prove to be profitable. The trustee cannot thus speculate with the income of the life tenant. 3 Bogert on Trusts and Trustees (pt. 2), 131, Section 601.

This situation presents two questions: First, the power and authority of the trustee under the will to make the purchases. On this issue we conclude that the trustee exceeded his powers in the purchase of these businesses. Second, the trustee having made the purchases, against whom should the cost be charged? The life tenant has received and now claims the income derived from such assets. The question now is one of the proper allocation of the cost of the businesses as between the life tenant and remaindermen.

The physical assets received through these purchases fall in the category of additional equipment and machinery purchased by the trustee. The physical assets received by the trustee, such as trucks, machinery, etc., should be charged to corpus in the same manner as any other additional equipment and machinery and depreciated over a period of years in the same manner, the life tenant to be charged annually for depreciation during the life of such assets. The difference between the value of the physical assets and the purchase price is the amount paid for goodwill and becomes a part of and chargeable to corpus. This method of accounting is discussed more fully under the next subheading.

c. Replacements — Additions to Laundry Building.

It is conceded that repairs to machinery, equipment and buildings are properly charged to income.

The referee found from the record that between May 1, 1938, and August 31, 1946, new property assets, such as machinery and equipment, were purchased at a total cost of $201,883.33, of which amount $140,091.20 was for replacements and $61,792.13 for additions. The purchase price of these various property assets was deducted from the net income as other charges in the year purchased, so that the distributable income to the life tenant was reduced over this period by reason of their cost. The referee found further that in each year the amount of depreciation on the items so purchased was credited to net income in determining the distributable income to the life tenant, and that during this period such credits amounted to $39,823.18 for replacements and $18,163.25 for additions, or a total of $57,986.43. The difference between the latter figure and $201,883.33, the total cost of such assets purchased up to the year of 1946, will be credited back to net income of the life tenant in succeeding years so that by 1955 the total depreciation credits will equal the amount of the cost of the assets.

The trustee and the legatees contend that, although the corpus at the beginning was valued at $79,000, the corpus is still valued at $79,000, and that the increased value of the business represents an increase in assets but does not represent an increase in the value of the corpus of the trust. We cannot accept this view of the situation. It is contended further that the difference between the original value of the corpus, $79,000, and the present value of the entire business is to a great extent represented by depreciation credits due the life tenant by reason of the purchase of replacements of machinery and the purchase of additional assets. It is contended further that in the event of the death of the life tenant at a time prior to the receipt by her of all such depreciation credits there will be due her estate the balance of such credits. In other words, the life tenant during her life will have her income reduced during any current calendar year by deducting therefrom the total purchase price of replacements and additional assets during the year of purchase. She will then be credited each succeeding year with a depreciation credit during the life of such machinery or assets. This method of operation of the trust and this system of accounting for charges and credits force the life tenant to finance the operation of the business out of her income from year to year. Because of the increase of the business and the expansion thereof by the trustee from year to year, the life tenant is required to forego each succeeding year a larger share of her income, so that at no time during the operation of the trust would she receive the total amount of income due her for any current year. As a result there would be from year to year an increasing total amount of depreciation credits due her. It is contended by the remaindermen that at her death her estate could make claim against the trust for the total amount of such depreciation credits due her.

The life tenant is not interested in accumulating depreciation credits. The life tenant is entitled to receive each calendar year the net income from the Atlas business after deducting operating expenses, taxes, and other charges, as defined by this court. If some of the assets which are considered to be corpus are replaced, the cost is charged to the corpus and a depreciation charge should be made against the income of the life tenant for each year during the life of such replacement. The same is true with respect to additions which depreciate through use and produce income.

In 1 Restatement of the Law of Trusts, 688, Section 233, Note L, the author states this principle of law as follows:

"If the improvements are not permanent in character but the probable life of the improvements is limited in duration, although the cost of the improvements is payable out of principal, the trustee is under a duty to the beneficiary entitled in remainder to amortize the cost of such improvements out of income, in accordance with such reasonable plan as he may adopt (compare Section 239). The result is that if the trust does not terminate before the end of the probable life of the improvements, the whole cost of the improvements will be paid out of income. This is fair because the beneficiary entitled to the income gets the full benefit of the improvements and the remainderman gets no benefit. On the other hand, if the trust terminates prior to the end of the probable life of the improvements, the payments from income will cease on the termination of the trust. This is fair because the beneficiary entitled to the income has not received the full benefit from the improvements but the remainderman receives a part of the benefit."

In 2 Scott on Trusts, 1265, 1266, Section 233.3, it is stated:

"Where, however, the improvements are not of a permanent nature, especially where the probability is that they will not last longer than the probable duration of the trust, a further adjustment has to be made in order to treat both life beneficiary and remainderman fairly. In such a case the investment will be treated as a wasting investment, and the trustee is under a duty to the beneficiary who is entitled to the principal to make provision for amortization. He must deduct from the income each year enough to amortize the cost of the improvement. Thus if the trustee makes improvements upon the trust property which will probably last for twenty years, he should pay for the improvements out of the principal and deduct each year approximately one-twentieth of the cost. This method of adjusting the cost between life beneficiary and remainderman is obviously the fairest method. It avoids the necessity of speculating upon the probable duration of the trust and deducting immediately a gross sum from the income for the whole period. It results in an equalization of the income from year to year instead of the deduction of a large amount all in one year. If the life beneficiary lives as long as the probable duration of the improvements, he will ultimately have paid for the improvements, which is just because in that case the remainderman ordinarily will have no advantage from the improvements. On the other hand, if the life beneficiary dies within a short time after the improvements are made, he pays for no more than the actual enjoyment he has had and the remainderman who profits in that case pays the balance of the cost.

"In the absence of special circumstances therefore all permanent improvements are paid for out of principal. Improvements which are not permanent but are reasonably expected to last only for a limited time are paid for out of principal, but are gradually amortized out of income if the trust lasts for a sufficiently long time. Ordinary repairs, on the other hand, are to be treated as annual expenses and are paid for wholly out of income. In the case of unusual repairs, however, it is proper for the trustee to spread the payment over more than one year. Thus he can make the payment out of principal and amortize as in the case of improvements."

We find this method to be the modern trend and it appeals to this court as the fairest method. See Mulcahy v. Johnson, 80 Colo. 499, 252 P. 816; In re Estate of Adler, 164 Misc. 544, 299 N. Y. Supp., 542; In re Del Drego's Estate, 179 Misc. 383, 36 N. Y. Supp. (2d), 811; Estate of Roberts, 27 Cal.2d 70, 162 P.2d 461; In re Sellers' Estate (Del.Ch.), 67 A.2d 860; In re Estate of Davies, 197 Misc. 827, 96 N. Y. Supp. (2d), 191, 199, 200. See, also, Lamb v. Lehmann, Trustee, 110 Ohio St. 59, 65, 143 N.E. 276, 42 A. L. R., 437.

The annual charge for depreciation should be computed by dividing the cost of the article by the number of years of its life's expectancy in use.

In our opinion, the trustee had the power and authority under the will to replace old and worn out machinery and equipment with machinery and equipment of modern design which increased the efficiency of the plant — such as washers, ironers, extractors, heaters, tumblers, presses, trucks, etc. However, he has no authority to purchase additions, such as competing businesses, additional real estate, etc. Such additions become a part of the corpus and increase the value thereof. We hold that the trustee has the power and authority to purchase additional machinery and equipment to take care of the normal increase in trade brought about through skillful management. Both the life tenant and remaindermen are entitled to the benefit of the normal increase of trust business. Beyond this the trustee may not go.

However, the life tenant has received and now claims the income derived from the use of certain additions which produce income and depreciate through use. It thus becomes a question between the life tenant and remaindermen of making the proper charge and giving the proper credit. The act is done, and the additions have become a part of the business from which income is derived, received and claimed. The question, therefore, is one of proper allocation of charges and credits. In our opinion the purchase of all additions operates to increase the value of the corpus and should be regarded as corpus. A proper depreciation charge should be made annually against the income during the life of such assets as will depreciate through use.

d. Taxes.

The referee found that the testator meant the word, "taxes," to include every kind and nature imposed by any public authority whatever, and that such taxes are to be charged against gross income. We approve the finding of the referee.

e. Release of Claims and Demands — Louis A. Voisinet.

The referee found from the record that Louis A. Voisinet had a substantial interest in the garment division of the Atlas company, which arose by reason of an agreement between Clay Thomas and Voisinet in 1934 when Clay Thomas took Voisinet into the business and started manufacturing garments used in his industrial supply business. The will gave the trustee full power and authority to settle the Voisinet claim and inasmuch as the claim was upon the earnings of the trust operation the settlement was properly chargeable against the income. We approve the finding of the referee.

f. Boiler Loss.

A boiler at the Atlas plant was destroyed. The claim was made against a casualty insurance company for the loss, which the insurance company refused to pay. Litigation ensued, which resulted adversely for the trustee. The loss was charged as an operating expense. To this the life tenant objects. The referee found that the boiler loss was properly deductible from gross income. We approve the finding of the referee.

g. Federal Income Tax.

The life tenant claims she is "entitled" to be paid the sum of $8,930.72 for federal income tax paid by the trustee on income not distributed to her. The trustee and the bookkeeper, Mr. Landgrave, each year prepared the income tax return for the life tenant. The net income for income tax purposes greatly exceeded the amount of income actually distributed to the life tenant for the corresponding current year. The life tenant now makes the claim for this over payment. The referee found that since taxes are charged against gross income he could make no finding in favor of the life tenant.

In our opinion the income of the life tenant, when proper adjustments are made by the accountant, will closely approximate the net income determined for federal income tax purposes. We make no finding in favor of the life tenant for this item.

h. Real Estate Purchased.

The record shows that the trustee purchased several lots across the street from the laundry upon which he proposed to build a garage to house the trucks and to use as a repair shop. Plans were drawn at considerable cost. The cost of the real estate and plans was paid out of income. The trustee had no authority to make the purchase in the first place, much less charge the cost to income. The real estate and plans for the building are corpus. The cost is charged to corpus and no depreciation can be charged to the life tenant.

Trustee's Question No. 3: "If any of the expenditures set forth in the eighth paragraph of this amended petition were not properly chargeable against income under the provisions of said will and codicil, is the defendant, Mae Thomas Hrobon, estopped by her knowledge of, acquiescence in or consent to, such expenditures herein properly chargeable against the income of the trust?"

The referee found that the doctrine of estoppel applied.

In case No. 4302 (unreported), decided on February 23, 1950, this court affirmed the judgment of the Probate Court in refusing the application of the life tenant to remove the trustee. It is contended that this court, in the removal proceeding, found that the life tenant had full information as to all purchases made by the trustee. A reference to our opinion does not disclose that we made such finding. In that case we found that there was no neglect of duty or incompetency on the part of the trustee, that the operation of the trust showed skillful management, and that there was no fraudulent conduct shown. We affirm our judgment on these matters. Our judgment in that case does not constitute res judicata here since the issues in the two proceedings are entirely different.

The trustee in this proceeding is not charged with bad faith. It is contended that the trustee misinterpreted the will. What his powers are under the will and codicil are uncertain. The trustee himself was in doubt, as the allegations in his petition in this proceeding indicate. The life tenant testified that from time to time as she inquired of the trustee and the bookkeeper, Mr. Landgrave, when she would receive the balance of her income, they would answer that it would be paid when they would "get around to it." At one time the record shows that the trustee said: "When we get around to it; we are a little short." The record does not show that at any time the trustee or the bookkeeper told the life tenant she had no additional income due her, which she claimed. The bookkeeper testified that he told the trustee and the life tenant there were several matters which the the court would have to settle.

It is pointed out that the trustee from time to time made application to the Probate Court for authority to do certain things in connection with the conduct of the trust. With the exception of the application for authorization to borrow $100,000, no notices were given to the life tenant and no hearings were had. So far as the record shows the life tenant had no knowledge of such applications and orders; and, even though the Probate Court has the power to control the conduct of trustees under Section 10501-53, General Code, such ex parte orders, without notice, were not binding upon the life tenant. McMahon, Admr., v. Ambach Co., 79 Ohio St. 103, 86 N.E. 512; In re Estate of Kachelmacher, 40 Ohio App. 282, 178 N.E. 314.

The record shows that the trustee filed his reports in the Probate Court and that after some insistence on the part of the life tenant copies of such reports were furnished her. These reports do not indicate the method pursued by the trustee in the operation of the business or the accounting system which was used by the trustee in determining the income due the life tenant. The bookkeeper testified: "In our reports to the court we never told what may have been or may not have been due to the life tenant on our records, we didn't know what that amount might be and so set it up as net profit — net worth and undistributed income, we never determined it." The trustee testified that he did not know what constituted corpus. No question was ever raised by any of the parties to this proceeding, or by the court, with respect to these reports. The approval of the reports by the Probate Court does not deprive the life tenant of the right to raise every question presented in this proceeding. The issue is largely between the life tenant and the remaindermen.

Whether the life tenant is estopped to make certain claims respecting the conduct of the trust does not affect the court's interpretation of the will. The question of estoppel has nothing to do with the will construction.

The record is clear that the life tenant reposed implicit confidence in the trustee and the bookkeeper. After the death of her husband she looked to Judge Holmes, the executor and trustee, for advice and counsel. She had no independent counsel. Her trustee was in a dominant fiduciary position.

Estoppel does not apply unless the party against whom it is to operate had full knowledge of all the facts and his rights under the law. In re Trusteeship of Stone, 138 Ohio St. 293, 34 N.E.2d 755, 134 A. L. R., 1306. The application of the doctrine of estoppel becomes necessary to protect the person relying on words or conduct from damage or an injurious change of position by reason of the conduct or words of another. Estoppel is intended to prevent a wrong to an innocent party. In the instant case the record does not show that the trustee or any other interested party at any time relied on the conduct of the life tenant. Rather, the life tenant relied on the conduct and judgment of the trustee.

There is a distinction between estoppel, acquiescence and ratification. 16 Ohio Jurisprudence, 586 et seq. The substance of estoppel is the inducement of another to act to his prejudice; acquiescence embraces all the elements of estoppel and assent to the act or conduct with full knowledge; the substance of ratification is confirmation after the act with full knowledge. On page 590 et seq., ibid, the term, "acquiescence," and the term, "ratification," are discussed. On page 591, ibid, Section 38, the author states:

"Both acquiescence and ratification are frequently spoken of as estoppel but, strictly speaking, neither can be more than part of an estoppel at best. An estoppel is a legal consequence, a right, arising from acts or conduct, while acquiescence and ratification are but facts presupposing a situation incomplete in its legal aspects, i. e., not as yet attended with full legal consequences. The most that acquiescence or ratification can do, is to supply an element necessary to the estoppel and otherwise wanting, such as knowledge of the fact at the time of making the misrepresentation. Each, however, stands upon its own ground and must be made out in its own way, not necessarily in the way required by the ordinary estoppel by conduct.

"Estoppel proceeds on the theory that the party's conduct has induced his adversary to take certain action on the faith of it, and that it would work injury to his adversary if the party were not compelled to be bound by such conduct. This element of knowledge and reliance upon the part of the adversary may not be present in ratification."

In Hampshire County Trust Co., Trustee Exr., v. Stevenson, a Minor, 114 Ohio St. 1, 150 N.E. 726, the court on page 14 held:

"Of course, in technical estoppel, the party to be estopped must knowingly have acted so as to mislead his adversary, and the adversary must have placed reliance on the action and acted as he would otherwise not have done. Some authorities, however, hold that what is tantamount to estoppel may arise without this reliance on the part of the adversary, and this is called ratification, or election by acceptance of benefits, which arises when a party, knowing that he is not bound by a defective proceeding, and is free to repudiate it if he will, upon knowledge, and while under no disability, chooses to adopt such defective proceeding as his own. Such conduct amounts to a ratification. Estoppel proceeds on the theory that the party's conduct has induced his adversary to take certain action on the faith of it, and that it would work injury to his adversary if the party were not compelled to be bound by such conduct. This element of knowledge and reliance upon the part of the adversary may not be present in ratification. Ratification means that one under no disability voluntarily adopts and gives sanction to some unauthorized act or defective proceeding, which without his sanction would not be binding on him. It is this voluntary choice, knowingly made, which amounts to a ratification of what was theretofore unauthorized, and becomes the authorized act of the party so making the ratification."

The distinguishing feature of acquiescence is that the party against whom it is asserted affirms or approves the transaction at the time it is done. Acquiescence does not arise by merely neglecting to assert rights.

In 16 Ohio Jurisprudence, 611, Section 53, the statement of the author is as follows:

"As was there pointed out, acquiescence, as the term is used in connection with estoppel, means something more than merely neglecting to assert one's rights. There must be joined with it, before it will operate to deprive a person of his legal rights, all the essential elements of an estoppel."

In 16 Ohio Jurisprudence, 611, Section 54, the author in discussing the acceptance-of-benefits doctrine states:

"The acceptance of benefits from a transaction, contract, instrument or statute may give rise to an estoppel to question its validity or to take advantage of any irregularity in connection therewith, at least where the one accepting such benefits does so with full knowledge of the facts and of his rights. It has been held, however, that no estoppel arises from the mere acceptance of benefits in the absence of such knowledge." (Emphasis ours.)

See, also, Hampshire County Trust Co. v. Stevenson, supra; 31 Corpus Juris Secundum, 341, 349, Sections 107, 109; 19 American Jurisprudence, 676, 682, 690, Sections 62, 64, 65.

With the exception of the purchase of The 5c Towel Supply Company and the Bowden Towel Supply Company there is no evidence whatever that the life tenant was consulted, or approved, consented or acquiesced with respect to any action of the trustee in the conduct of the trust and, more specifically, in transactions involving the expenditure of income of the life tenant in the purchase of replacements, additional assets, and other businesses. We have already discussed the transaction relative to the purchase of The 5c Towel Supply Company and the Bowden Towel Supply Company, and after scrutinizing the record closely we find no evidence with respect to this transaction, to indicate that the life tenant had full knowledge of the facts and her rights or approved or consented to the transaction or acquiesced in the purchase of the businesses and the payment therefor out of income. But conceding that the life tenant did have knowledge of the purchase of The 5c Towel Supply Company and the Bowden Towel Supply Company, and participated in it, such knowledge and acquiescence would not affect the allocation of cost. On that matter the record is silent.

In our judgment there is no evidence in the record which would justify a finding that the life tenant was estopped by reason of any act or conduct on her part prior to the institution of this action. However, ratification by the acceptance of benefits may operate and be effectual at any time after the act.

After this action was instituted and after she employed counsel to make defense to the action and was apprised of her rights, both in the lower court and in this court, the life tenant claimed the income derived from all the activities of the trustee in the conduct of the trust, i. e., income derived from the purchase of competing businesses and the purchase of additional machinery and equipment, the cost of which is charged to corpus. In our opinion the life tenant, by pursuing such course of action, has ratified the acts of the trustee by the acceptance of benefits. Thus, the life tenant is now estopped by the application of the "ratification-by-the-acceptance-of-benefits" doctrine to raise any question regarding any unauthorized purchase by the trustee. This is sometimes spoken of as the "quasi estoppel doctrine." However, the life tenant is not estopped to raise the question as to the proper allocation of the cost of such purchases, whether to income or corpus, and the method employed by the trustee in making charges and giving credit therefor. To this extent the finding of the referee will be modified.

Trustee's Questions Nos. 4, 5 and 6.

These questions have been withdrawn by the trustee and no party to this proceeding has requested an answer.

Trustee's Question No. 7 (Life Tenant's Question No. 1): "Is the surviving spouse to be paid any income from business transacted by the executor during the administration of the estate, prior to the setting up of the trust estate, in addition to the amount allowed her for her support?"

The life tenant's question No. 1 is substantially the same although couched in different language.

It is the contention of the trustee and remaindermen that the life tenant was not entitled to any income during the administration of the estate. This was the finding of the referee. The life tenant contends that her income began as of the date of the testator's death.

The fact that a liberal year's allowance was given to the widow and that she was the beneficiary in certain life insurance policies on the life of the testator should be given little or no consideration in determining this question; at least this fact is in no sense controlling. The intention of the testator must be drawn from the four corners of the will.

Two distinct rules have been followed. The Massachusetts rule is that the life beneficiary is entitled to the income, unless the will otherwise provides; the New York rule is that such income is capitalized as part of the trust corpus when the trust is established.

Ohio has followed the Massachusetts rule and this principle of law is laid down in Davidson v. Minors Mechanics Savings Trust Co., Exr., 129 Ohio St. 418, 195 N.E. 845, the third paragraph of the syllabus of which is as follows:

"Where one is bequeathed the income from certain property for life, he is entitled to such income from the death of the testator, in the absence of anything in the will to the contrary."

In the course of the opinion, on page 429, the court stated:

"It is stated in 2 Perry on Trusts and Trustees (7 Ed.), 939, Section 551, that `the general rule is now well established that when property is devised or bequeathed in trust to pay the income to a person for life or for a limited time, he is entitled to either actual or equitable income from the date of the testator's death, unless the testator has indicated an intention that the enjoyment of income shall not begin until some later date.' Authorities confirming this general proposition are legion."

In Hegner v. Hegner, Admr., 9 Ohio App. 147 (motion to certify overruled), it was held that if the income did not go to the income beneficiary it would place upon the life tenant the burden of the payment of the debts and costs of administration which are properly charged to corpus. See, also, 4 Page on Wills (Lifetime Ed.), 526, Section 1591; 4 Bogert on Trusts and Trustees (pt. 1), 155, Section 811; 4 Schouler on Wills, 2616, Section 3158; 1 Restatement of the Law of Trusts, 692, Section 234; 2 Scott on Trusts, 1277, 1282, Sections 234, 234.3.

We look to the will to determine whether the testator used any language which indicated that the income of the life tenant should begin at a date later than the date of the death of the testator. No such words are found in the will. No time is fixed.

The trustee and remaindermen contend that it is significant that in items II, III and IV in which the testator left pecuniary legacies to his two sisters and a brother he used the expression, "executor or trustee," whereas in item V the testator directed "my said trustee" to pay the income derived from the trust res to the life tenant. It is contended that since the testator did not provide that the "executor or trustee" should pay the income to the life beneficiary, the testator manifested an intention that only the trustee should pay the income, and it is concluded that the trustee can only pay to the life beneficiary income produced from the trust after it is set up. We cannot agree. A different principle of law is applicable to the payment of the general pecuniary legacies. Under the Ohio law the payment of these legacies would not be due until the time had expired for the settlement of the estate. 41 Ohio Jurisprudence, 972, Section 857. The testator provided that such legacies should be paid in monthly installments. Not knowing when the estate would be settled the testator used both fiduciary terms, and there is support for the contention that the words, "executor" and "trustee," were used rather loosely throughout the will.

The income beneficiary of the trust can receive the income only from the trustee and not from the executor, but this fact has never militated against the right of the income beneficiary to receive the income after the death of the testator from the trustee after the trust is established. From the moment the will is probated both the executor and trustee must recognize the problem involved, in that income from property which thereafter goes into the trust must be accounted for, as well as income from property which is appropriated for the purpose of paying debts, costs of administration, etc. The executor must pay such income to the trustee at the time the trust is established, and the trustee, in turn, must account to the income beneficiary for such income. 2 Scott on Trusts, 1278, Section 234.2, and cases there cited; Mulcahy v. Johnson, 80 Colo. 499, 504, 252 P. 816; In re Estate of Marre, 18 Cal.2d 184, 190, 114 P.2d 586. The executor and trustee failed to segregate principal and income as required, and this must now be done in a proper accounting.

An extended annotation on this question is found in 70 A.L.R., 636, supplemented by annotations in 105 A. L. R., 1194, and 158 A. L. R., 441. The many cases cited by counsel in the briefs are referred to in these annotations. Space does not permit a review of all these cases. We are content to quote several conclusions of the editor which answer the contentions made by the trustee and remaindermen.

In 70 A. L. R., 638, it is stated that the right of the life tenant to the income from date of death "is not altered by the fact that the income does not become due or payable until after the close of the administration, or that the residue of the estate (the corpus of the trust) cannot be determined until the close of administration — the question being merely one of postponement of the enjoyment of the income, as distinguished from the vesting of the right thereto.

"The general rule is based upon the presumed intention of the testator to favor, in the absence of an expressed intention to the contrary, the immediate object of his bounty, in preference to more remote beneficiaries, who may not even be in esse at the time of his death."

Where the provisions in the will indicate that the income is given for support and maintenance the courts universally hold in favor of the life tenant. However, it is said on page 639, ibid, that the better view is that the rule rests "on the equity which seeks to give to each (the life tenant and the remainderman) his due, and it is not, in its application, confined to gifts of maintenance and support."

On page 644, ibid, it is stated, "the result reached in cases of gifts of the income of residue is also reached (perhaps with stronger reason) in cases of gifts of the income of a specified sum taken out of the general estate. And this is so, though the present enjoyment of the income may be postponed until after the settlement of the estate."

This statement applies with much force to the facts in the instant case, where the principal asset in the corpus of the trust is the laundry, the income from which is given to the life tenant as a specific legacy.

Comment on this situation is found on page 647, ibid, as follows:

"In case the corpus of the trust fund is a specified amount, there is little ground for the contention that the testator intended that the right of the beneficiary of the income should not accrue until the amount out of which the income is payable is determined, as may be contended in case of the income of the residue. On the other hand, the fact that the corpus of the fund is fixed is an indication that the testator intended that the remainderman should receive no more than the sum fixed, unless the remainderman is also the residuary legatee.

"The general rule is not altered by the fact that the will directs the executor or trustee to invest the fund."

On page 641, ibid, it is stated that even though the trust cannot be set up until the administration is complete "in the sight of the law the trust is in progress from the testator's death unless a contrary intent is apparent in the will. If this were not so, the time when the income should become payable would be subject to the caprice or neglect of executors, or casual delays in the probate; and hence income which accrues between the death of the testator and the setting apart of the fund for the purposes of the trust must be paid to the beneficiary."

In 105 A. L. R., 1194, it is stated, and we so hold in the instant case, that the question presented "involves a controversy between the life beneficiary and the person entitled to the corpus of the trust fund."

In 158 A. L. R., 442, the general rule is restated, and the rule is not altered by the fact that the will provides that the trustee rather than the executor is to pay the income, or that the income is not due and payable until the close of the administration. Many recent cases are cited in support of this rule.

The state of Wisconsin has recently reversed its position and adopted the Massachusetts rule. See Will of Leitsch, 185 Wis. 257, 201 N.W. 284, 37 A. L. R., 547. In Mulcahy v. Johnson, supra, the court, in the second paragraph of the syllabus, said:

"In all doubtful cases, the interests of life tenants are to be preferred to the interests of the remaindermen." See, also, Davis v. Harbaugh, Exr., 76 Colo. 73, 230 P. 103.

The facts in the instant case are even more favorable to the life tenant than the facts in any of the cited cases in which the life tenant was decreed the income from the date of the death of the testator. In the instant case no other provision was made in the will for the life tenant. The income was for her use and benefit for and during her natural life, and under the terms of the will and the evidence it may reasonably be concluded that the income given by the testator to his widow was in the nature of maintenance and support. With respect to the laundry, the income was payable out of a specific part of the assets of the estate and trust, and no segregation was required to determine this part of the trust res. The life tenant was the first object of the testator's bounty. No date is fixed in the will from which the life tenant is entitled to receive the income, nor is there any provision in the will, express or implied, which would require a construction denying to the life tenant the income from the date of death of the testator.

Another question requires an answer. Who receives the income derived from assets which are used in the liquidation of the estate? Is it treated as income or corpus? The courts have promulgated two distinct rules. The Massachusetts rule is that income derived from funds or assets subsequently appropriated in the payment of debts, administration expenses, taxes, etc., constitute income and not corpus, and, as such, is payable to the income beneficiary. The New York rule, which is very similar to the English rule, is that such income, if not disposed of by express terms of the will, is added to the trust res. It is stated that the New York rule is supported by the decided weight of authority. The New York rule is followed in Connecticut, Delaware, Kentucky, Maryland, New Hampshire, New Jersey, and the English cases. The Massachusetts rule is followed in North Carolina and Rhode Island. In Proctor v. American Security Trust Co., 69 App., D.C., 70, 98 F.2d 599, the court approved and followed the New York rule. 1 Restatement of the Law of Trusts, 695, Section 234, states the New York rule. It is stated that the Massachusetts rule is simpler and easier to apply. See 2 Scott on Trusts, 1284, Section 234.4. There is no reported case by the reviewing courts of this state on this question.

However, we do find that this question was before Nelson J. Brewer, Probate Judge of Cuyahoga County, in Central National Bank of Cleveland, Trustee, v. Coyle (1943), 40 Ohio Law Abs., 441, 14 Ohio Supp., 115. Judge Brewer, in a well considered opinion, discussed the two principal rules which are generally followed and on page 448 concluded that in the case he was considering the intention of the testator would be better served by applying the Massachuetts rule and stated his reasons as follows:

"This finding is based on the belief that the life tenant is generally the prime object of the bounty of the testator and is his first consideration, while the ultimate beneficiary has secondary consideration and, therefore, any favoring between the life tenant and the ultimate beneficiary should be in behalf of the life tenant.

"By following the Massachusetts rule the administration of both the estate and the trust can be greatly simplified since the complicated accounting necessary under the New York-English rule can be avoided. This would further tend to eliminate possible litigation which might arise as a result of the accounting.

"The fact that the state of New York, by statute, has abrogated the rule established in its courts also indicates that the intention of the law generally is to favor the life tenant."

We believe the Massachusetts rule to be the better rule. In view of the holding of this court respecting the first phase of the question presented, and because the testator provided that the legacies to Mann, Watson and Thomas were to be paid by the "executor and trustee" in monthly installments and made the payment of such legacies a charge on income from property other than the laundry, it would better serve the intention of the testator to regard such payments as "income" rather than "corpus."

The finding of the referee is set aside and an order made in conformity herewith.

Trustee's Question No. 8 (Life Tenant's Question No. 5): "Are the specific legacies to the other defendants to be charged to the corpus of the estate and trust, or to the income from the trust businesses?"

Life tenant's question No. 5 is similar in import to trustee's question No. 8.

It is the contention of the trustee and legatees that all the legacies are payable out of income. The life tenant contends that assets should have been set aside by the executor-trustee at once from the corpus of the estate and invested in government bonds or other securities of like nature, under the provisions of item IV of the will.

In items II, III and IV of the will testator left to each of his two sisters and to a brother the sum of $15,000 and provided that the same should be paid to them by his executor and trustee at the rate of $100 per month, or in a greater sum should the executor or trustee deem it necessary and convenient.

In item IV is found a precatory provision wherein the testator expressed his wish that his trustee should hold, manage and control the corpora of the bequests made in items II, III and IV, and that his executor and trustee should invest the funds in government bonds or other securities of like nature such as his trustee, in his discretion, may deem best. In item V the testator provided that the trustee should pay to the wife, in addition to the income from the Atlas Linen, Laundry Supply, "any other income that I may have after the payment of the other monthly legacies which I herebefore have set out." In this later provision the testator made the payment of the monthly legacies a charge upon any income derived from any source other than the Atlas Linen Laundry Supply.

In the codicil testator left $10,000 to Margaret Cassidy, payable in monthly installments of $100 each, and made the payment thereof, together with interest on the unpaid balance, "a charge upon my business, which is known as the Atlas Linen, Laundry Supply." No question is raised with respect to the legacy of Margaret Cassidy. It is definitely made a charge upon the income from the laundry business, and the trustee has paid this legacy in full from the income derived from such business. The dispute between the life tenant, the trustee, and the legatees relates to the payment of the three $15,000 legacies left to the two sisters and the brother.

The trustee never invested funds in government bonds or other securities or made any effort to set up a fund out of which these legacies could be paid. The trustee contends that upon liquidation of the estate there were not sufficient assets to carry out the precatory provision in item IV of the will. The provision being precatory in character compliance was not required. The record shows that the trustee paid these legacies out of the net income of the trust.

The three legacies given in items II, III and IV are general pecuniary legacies. 4 Page on Wills (Life-time Ed.), 107, Section 1393. See, also, In re Estate of Painter, 150 Cal. 498, 89 P. 98; Kearns, Exr., v. Kearns, Exr., 77 N. J. Eq., 453, 76 A. 1042, 140 Am. St. Rep., 575; Koehl, Exr., v. Haase, 125 N.J. Eq. 567, 5 A. (2), 306; In re Corby's Estate, 154 Mich. 353, 117 N.W. 906; Henderson v. First National Bank of Rome, Exr., 189 Ga. 175, 5 S.E.2d 636, 128 A. L. R., 816; Weed, Exr., v. Hoge, 85 Conn. 490, 83 A. 636; Robinson, Exr., v. Mclver, 63 N.C. 645; Dauel v. Arnold, Admr., 201 Ill. 570, 66 N.E. 846.

The provision in item V whereby the testator provided that the income from the laundry business should be paid to his wife for life is a specific legacy. The fact that this provision is found in a general residuary clause does not take away its character as a specific legacy. 41 Ohio Jurisprudence, 857, 865, 871.

In Koontz, Exr., v. Hubley, a Minor, 19 Ohio App. 484, affirmed by the Supreme Court in 111 Ohio St. 414, 145 N.E. 590, the testator left a specific devise in the general residuary clause. The court of appeals, on page 488, said:

"That the real estate devised is mentioned in the residuary item would not in itself defeat the specific character of the devise. 40 Cyc., 1871-1877; 2 Alexander on Wills, pages 974-975, 28 Ruling Case Law, page 297, and cases therein cited."

We find the principle of law well established that a specific legacy or devise may be embraced in the residuary clause. 57 American Jurisprudence, 952, 953, Section 1422. In Knepper v. Knepper, Exr., 103 Ohio St. 529, 134 N.E. 476, the court held that the intention of a testator to charge legacies on specifically devised property must clearly appear or be clearly deducible from the language of the will. In the case at bar the testator clearly indicated his intention that the three general pecuniary legacies in question should be made a charge only on "any other income" exclusive of income derived from the Atlas Linen, Laundry Supply, which was the subject of a specific legacy to the life tenant.

Where a conflict arises in the liquidation of an estate, or in the payment of general and specific legacies, the property which is the subject of the specific legacies must at all hazards be protected for the payment of the specific legacies, and if the property other than the assets bound by the specific legacies is insufficient to pay the general legacies an abatement of the general legacies takes place.

In the instant case the three general pecuniary legacies should have been paid out of personal property and if the personal property was insufficient, payment would then be made out of real estate, or any property in the estate or the income therefrom, other than the Atlas Linen, Laundry Supply. These three legacies would be a charge only on income derived from trust property other than the Atlas Linen, Laundry Supply.

General legacies will abate in order to pay the specific legacies in full, even if it involves the complete obliteration of a general legacy. See 41 Ohio Jurisprudence, 962, Section 845; 4 Page on Wills (Lifetime Ed.), 328, Section 1498. The payment of these legacies has not been made a charge on the laundry business or on the income derived therefrom. It was the purpose of the testator to give the income from the laundry business to his wife as the primary object of his bounty. The income from the laundry business was the only property which he gave to his wife, and the testator clearly showed his intention to protect her income against all claims except the Cassidy legacy.

The fact the testator provided that these three legacies should be paid by the trustee does not make them a charge on the laundry business. The testator undoubtedly believed that there would be other assets in the trust from which income might be derived out of which the legacies could be paid. As a matter of fact there are assets in the trust other than the laundry business from which the trustee has derived income and which may be liquidated for the purpose of paying these legacies.

The trustee contends, and the referee apparently is in accord, that, inasmuch as the testator provided that his laundry business should continue to operate as long as it proved profitable, it was the testator's wish that the three legacies in question should be paid out of the income from the laundry business rather than bring about a liquidation of the laundry business for the purpose of paying such legacies. The fallacy of this contention lies in the fact that general pecuniary legacies must abate, either in whole or in part, as against the payment of specific legacies.

There may be sufficient property available other than the laundry business out of which these legacies may be paid. It will require the services of an accountant to check the records of the administration of the estate by the executor and to segregate the assets of the estate and trust, setting apart all assets which came into the trust other than the laundry business, for the purpose of determining whether, upon the liquidation of such assets and the payment of debts and costs of administration and other expenses properly chargeable to such assets, there will be sufficient property remaining, or income therefrom, for the payment of such legacies.

We set aside the finding of the referee and hold that the specific legacies mentioned in items II, III and IV of the testator's will are a charge upon the corpus of the estate and the trust and the income derived therefrom exclusive of that portion of the corpus of the estate and trust represented by the laundry business or income derived therefrom.

Trustee's Question No. 9: "Is the interest accruing, subsequent to testator's death, on his obligations and on obligations incurred by the executor-trustee, subsequent to testator's death, to be charged to income from the operation of the trust property, or to corpus?"

The referee found that interest accruing subsequent to testator's death on his obligations and on obligations incurred by the executor and trustee are to be charged to the income from the operation of the trust estate.

Here again there is a failure to preserve and protect the income due the life tenant from the trust and to first charge against the general assets of the estate interest accruing on obligations incurred by the testator prior to his death. Interest accruing on obligations incurred by the testator should be paid out of the corpus of the estate — first out of the personal property of the decedent and then out of the real estate other than the Atlas business. Interest on obligations incurred by the executor-trustee which do not grow out of the operation of the Atlas business is chargeable to property or income therefrom exclusive of the laundry business. Interest on obligations incurred by the executor-trustee in the operation of the laundry business is chargeable to income from said business.

We set aside the finding of the referee and make an order in accordance herewith.

Trustee's Question No. 10: "Did the testator intend that the mortgage debt on the parcel of land and building thereon, from which was and is conducted the Atlas Linen, Laundry Supply business, be paid out of income from either the real estate business or the laundry and supply business, or out of the corpus of the trust property; and if out of corpus, out of what corpus; that is to say, the laundry and supply chattels or the corpus of the real estate?"

The referee found from the evidence that on the date of the testator's death there was a mortgage balance on the Atlas plant site in amount of $17,500 with accrued interest amounting to $80.21. The referee made a finding that the mortgage debt on the Atlas plant site, existing at testator's death, should be paid from any part of the corpus of the estate, so long as it is not necessary to interfere with the operation of the Atlas Linen, Laundry Supply business.

We modify the finding of the referee by being more specific in holding that the mortgage debt and interest accruing thereon should first be paid out of personal property and if the personal property is insufficient then out of real estate in said estate exclusive of the Atlas business. If such assets are insufficient to liquidate the obligation, the Atlas business should be charged for its payment.

Trustee's Question No. 11: "Did the testator intend that any part of the other mortgage obligations, and if so what part, shall be paid out of the corpus or any part of the income, and if out of income, what income; that is to say, profits on the sale of the parcels of real estate, or the income from any source?"

The referee was correct in construing this question to apply only to existing mortgage indebtedness other than that on the Atlas plant at the time of the testator's death and additional mortgage indebtedness incurred by the trustee on real estate other than the Atlas plant. The referee found that the mortgage indebtedness with accrued interest as of testator's death is a charge against the corpus of the estate.

We modify this finding, holding that mortgage indebtedness with accrued interest as of the testator's death is first a charge against the personal property and next against the real estate, exclusive of the laundry business, and, finally, against the laundry business if other assets are insufficient to make payment.

The referee found further that mortgage indebtedness incurred by the trustee was for the purpose of completing construction of homes for liquidation on a number of vacant lots left by the testator; and, that some of the money realized on construction mortgage loans on such property was used in the operation of the laundry business. The exact amount of money derived from the construction business and used in the laundry business is not definitely clear but that a substantial amount of such money was used is undisputed.

On the basis of these facts the referee found that so much of the proceeds of the mortgage loans for construction purposes as went into construction of houses upon real estate for residence property to be sold was a charge against the corpus and payable out of the corpus, that is, proceeds of the sale of said property. We interpret the finding of the referee to mean that mortgages on real estate involved in the construction business would be paid out of the proceeds derived from the sale of such real estate. We believe this to be the proper finding.

The referee found and held that so much of the proceeds of the mortgage loan construction money as was used in the operation of the laundry business is a charge against income of the trust estate because that amounts to the use of corpus funds for the payment of charges against income. In view of this court's ruling on other matters, it becomes necessary to segregate the income derived from the operation of the Atlas plant from the income derived from other assets and particularly from the conduct of the residential construction business. The segregation is made necessary by reason of the fact that the three legacies herein must be paid out of assets, or income derived therefrom, other than the laundry business. Therefore, any proceeds derived from the sale of houses constructed by the testator or the executor-trustee, or any profits derived therefrom which have been used in the laundry business, should be withdrawn and used for the purpose of liquidating the debts of the estate, paying other expenses incident to its administration and, finally, for the payment of said legacies.

Any money thrown into the operation of the laundry business which was derived from some other source, together with six per cent simple interest, would be a charge against the income of the laundry business. The accountant, upon segregation of the assets and income therefrom, should make the proper adjustment, charging the laundry business with so much of the profits and income as came from other sources and placing such proceeds in a separate fund in order to determine whether there will be sufficient assets to pay the three legacies mentioned above.

The referee's finding is modified in accordance herewith.

Trustee's Question No. 12: "Are profits from sales of real estate to be credited to and become a part of the trust estate corpus, or to be treated as income and disbursed accordingly; or if treated as income, how much of the sale money is profit?"

The referee found that under the will and codicil the trustee was empowered to continue residential construction business; that the executor-trustee as rapidly as possible sold the lots and constructed houses on the vacant lots in an effort to avoid losses; and that the trustee's sole object was to liquidate this part of the estate and concentrate upon the operation of the laundry business. The referee held that the real estate construction business was not in fact a business conducted by the trust but rather a process of liquidation and for such reason that all the real estate transactions of the trustee were corpus transactions. The referee found further that there was considerable outstanding indebtedness against the real estate at the time of the testator's death, and that the entire operation of the real estate construction business was directed to the end that this indebtedness be liquidated. The executor and trustee did liquidate this indebtedness. The referee held that any profits derived therefrom must be allocated to the corpus of the estate.

We are in accord with the finding of the referee. See Willis v. Holcomb, Trustee, 83 Ohio St. 254, 94 N.E. 486; Devenney v. Devenney, 74 Ohio St. 96, 77 N.E. 688; 1 Restatement of the Law of Trusts, 682, Section 233 (b).

Trustee's Question No. 13. (Life Tenant's Question No. 4): "Shall premiums on the policy insuring the life of Harry B. Holmes, as trustee, for the sole benefit of this trust, be charged to income from any source or be charged to the corpus of the trust estate?"

The trustee and the legatees contend that the trustee had authority under the will and under the law to insure his life for the benefit of the trust and pay the premiums out of income. The life tenant contends that the trustee had no such authority.

With respect to the factual development the referee found that on March 27, 1942, the Probate Court approved the application to purchase life insurance, and that on April 7, 1942, the trustee purchased a life insurance policy on his life (No. 671965 in the Lincoln National Life Insurance Company of Ft. Wayne, Indiana), the principal amount of the insurance being $75,000 for the first 16 policy years and $36,225 for the remaining policy years, the annual premium being $2,264.25. The trustee of the estate of Clay M. Thomas was named beneficiary of the policy. The referee found from the evidence that from April 7, 1942, the date of the policy, to August 31, 1946, the end of the period of accounting under consideration in this case, the total expenses of insurance charged to the income of the trust amounted to $6,961.75. The trustee reasoned that the testator in giving authority to his trustee in item VI of his will "to do all things necessary or proper in the usual course of said business" authorized the trustee to insure his life for the benefit of the trust in pursuance of a common practice among officers and executives of corporations. The referee further found that the trustee was authorized to purchase said insurance under the provisions of Section 10506-41, General Code, and that the premiums on the policy were properly chargeable to income but ordered a change of beneficiaries so that the proceeds of the policy would be payable to the life tenant in conformity to the provisions of Section 10506-41, General Code.

We find that the application filed in Probate Court did not state whether the premiums were to be chargeable to income or corpus and to whom the insurance proceeds would be made payable. It is asserted that upon examination of the will there is found no limitation on the authority of the trustee which would preclude the purchase of the insurance and that for this reason the trustee was authorized to make the purchase. This court cannot follow that line of reasoning. We are of the opinion that unless the terms of the will expressly authorize the trustee to purchase insurance he has no authority to do so. We find no provision in the will expressly or by implication authorizing the trustee to purchase insurance on his life for the benefit of the trust or any of the beneficiaries.

We come now to a consideration of Section 10506-41, General Code. This section provides for and controls investments of trust funds by executors, guardians or trustees. The applicable part of the section is as follows:

"Except as may be otherwise provided by law or by the instrument creating a trust, a fiduciary having funds belonging to the trust which are to be invested may invest them in the following:

"* * *

"(f) Life, endowment, or annuity contracts of legal reserve life insurance companies regulated by the provisions of chapters 1 and 2 of subdivision I of division III of title IX (Section 9339 et seq.) of the General Code of Ohio and duly licensed by the superintendent of insurance of Ohio to transact business within the state. The purchase of contracts authorized by this subsection shall be limited to executors or the successors to their powers when specifically authorized by will, and to guardians and trustees. Such contracts may be issued on the life or lives of a ward or wards, a beneficiary or beneficiaries of a trust fund, or according to the terms of a will, or upon the life or lives of persons in whom such ward or beneficiary has an insurable interest. Such contracts shall be so drawn by the insuring company, that the proceeds or avails thereof shall be the sole property of the person or persons whose funds are invested therein." (Emphasis ours.)

The term, "fiduciary," in the first paragraph of this section embraces "trustee." It will be observed that the fiduciary can invest only in life insurance under the provisions of this section when he has funds belonging to the trust which are to be invested. In the instant case the income from the trust does not constitute funds in the hands of the trustee which he is authorized to invest. The income from the trust is payable to the life tenant. Furthermore, conceding that the trustee had authority, either under the will or under the law, to purchase the insurance, this section specifically provides that the contract of insurance shall be so drawn that the proceeds thereof shall be the sole property of the person whose funds are invested therein. In conformity with the provisions of this section the referee ordered the change of beneficiaries so that the contract of insurance would provide that the proceeds thereof would be payable to the life tenant.

We are of the opinion that the trustee had no authority, either under the will or under the law, to purchase the insurance and to charge the expense thereof to the income of the life tenant. The findings of the referee will be set aside and an order will be made in accordance herewith. The trustee will be surcharged with all expenses of the insurance charged to the income of the life tenant.

Trustee's Question No. 14: "Are real estate and personal property taxes accruing since May 1, 1938, to be charged to the income derived from the operation of the trust property, or to corpus?"

In general we are in accord with the finding of the referee that real and personal property taxes accruing since May 1, 1938, are charges against income derived from the operation of the trust estate. However, in view of our holding on other matters, we order a segregation of the Atlas business from the other assets in the trust and hold that real and personal property taxes accruing since May 1, 1938, on the laundry business should be charged to the income from the laundry business, and that real and personal property taxes accruing since May 1, 1938, on other assets, exclusive of the laundry business, should be charged to the income derived from such other assets. We order a modification of the finding of the referee in accordance herewith.

Part VI.

We come now to consider the questions propounded by the life tenant in her answer. Questions numbered 1, 2, 3, 4 and 5 propounded by the life tenant in her answer have been answered in connection with questions propounded by the trustee. However, the life tenant has propounded certain questions which require specific answers.

Life Tenant's Question No. 6: "Is the trustee authorized to convert the real estate of the estate, other than that used in the laundry business, into cash and spend this cash in the enlargement and additions of the original laundry business?"

The referee found that in item VI of the will the trustee is given "full power and authority to sell and dispose of any or all of the estate, to sell at public or private sale, at such price and upon such terms of credit or otherwise as the trustee may deem best, the whole or any part of the real or personal property"; and that in item VI of the will, and also in the codicil, the trustee is given full power and authority to conduct and carry on the laundry business so long as it proves profitable. The referee found that so much of the profits from such sales as have been used to improve the Atlas Linen, Laundry Supply Company business are expenditures from corpus; and that, on the other hand, any of the profits from real estate sales used for plant operations of the Atlas business should be returned to corpus from income.

Again there is a failure to take into consideration a segregation of the assets of the trust, that is, the segregation of Atlas business from all other assets in order to determine whether the three legacies may be paid. Unquestionably, the trustee had full power and authority to convert the real estate into cash. But the cash derived from such conversion of real estate should first be used to liquidate the indebtedness of the estate and for the payment of the three legacies above mentioned. If, after the payment of all claims against the estate and the cost of administration and the three legacies mentioned above, there would still remain assets in the trust from which a portion had been thrown into the operation of the laundry business, such portion of the assets which were used in the laundry business would become a part of the corpus. This question applies only to proceeds derived from the sale of real estate. It does not involve income derived from real estate.

We have hereinbefore held that the trustee has no authority to make additions to the laundry business. We hold that the trustee has authority to replace old machinery with more modern and efficient machinery and to purchase more efficient equipment to take care of an expanded trade. We realize that skillful management would ordinarily cause an increase of business and to that extent an enlargement would be accepted as proper. But the purchase of competing businesses and the equipment therefrom and additional machinery to take care of such enlarged business is not within the power conferred on the trustee. But having done so, it now is a matter of accounting between the life tenant and remaindermen. Such additions are charged to corpus and a depreciation charge made annually against the income during the life of such additions.

The referee's finding is set aside and a finding made in conformity herewith.

Life Tenant's Question No. 7: "May the trustee use the income of the trust in enlarging and adding to the original laundry business?"

The question here raised was discussed in answer to trustee's question No. 2 and life tenant's question No. 6. The answer to this question will conform to the answers given to those two questions. Further discussion is unnecessary.

Life Tenant's Question No. 8: "What is the amount now due this answering defendant from the trustee under the terms of the will and under the terms of the trust created by the will of the decedent?"

The period covered by the trust operation, for the purpose of this action, begins January 1, 1939, the date on which the trust was established and extends to August 31, 1946, the closing date of the accounting made by the expert accountants for the court.

The referee found that during this period the trustee paid to the life tenant as income the total sum of $263,299.72. The life tenant claims that the net income of the trust during this period amounted to $420,251.22, and that, after deducting the Margaret Cassidy legacy, there is due her for this accounting period the sum of $146,102.57, together with other items, including the costs of repairs, depreciation, cost of purchasing competing businesses, and float, making a total claim of $1,171,369.17. The referee found that the claims of the life tenant with respect to these income items were unfounded. The referee further found that the sum of $420,251.22, which was designated as "net income" in one of plaintiff's exhibits, does not properly represent the amount due the life tenant under the provisions of the will. The referee distinguished between net income and distributable income, i. e., from the net income there were deducted certain charges, leaving a balance which has been conveniently designated as distributable income, and found that under the terms of the will the life tenant is not entitled to "net income" but is entitled to receive only what the referee found to be distributable income. The referee found that after making certain deductions the distributable income for the period amounted to $198,441.33, which shows an overpayment to the life tenant for the period of $64,858.39.

As hereinbefore stated, this court can find no objection to making a distinction between net income and distributable income, if the proper method is pursued in determining net income and distributable income.

In view of the ruling of this court and the modification of the referee's findings on a number of issues raised in this proceeding, we cannot, at this time, determine what amount is due the life tenant. A further accounting must be had to determine that amount.

The court sets aside the finding of the referee on this issue.

Life Tenant's Question No. 9: "Should the cost and the expenses of this litigation be charged to the income of the life tenant, or to the corpus of the remaindermen?"

The life tenant contends that all expenses of this litigation should be charged to the corpus. The trustee and the remaindermen contend that the expenses of this litigation are properly chargeable to income on the ground that the demand of the life tenant for additional income in a letter to the trustee dated September 23, 1946, made it necessary that the trustee file this action for declaratory judgment in order to protect the trust estate.

The judgment of the Probate Court charged against the income "all costs incident to, or growing out of this suit, which shall specifically include court costs, stenographic and accounting charges heretofore ordered paid by this court, and compensation to the special master commissioner, attorney for the trustee and attorney for Clara J. Thomas Mann, Millie K. Thomas Watson, Ray G. Thomas and Margaret Cassidy, which have been or may hereafter be allowed to them for their services in this suit." The referee approved this finding.

This action for declaratory judgment, which is essentially an action to construe the will and for a proper accounting between the life tenant and the remaindermen, as well as between the life tenant and the trustee, was instituted in the Probate Court.

Section 10501-22, General Code, was amended, effective August 22, 1941, by adding to this section the following paragraph:

"Unless it is expressly otherwise provided by law, in all actions or proceedings had in the Probate Court, whether ex parte or adverse in character, the court may award and tax costs, and apportion them between the parties, on the same or adverse sides, as it adjudges to be right and equitable."

The purpose of this amendment was to confer upon the Probate Court the same general power to award and tax costs and apportion them between the parties as is conferred upon courts of Common Pleas by Section 11628, General Code.

The term, "costs," as used in Section 10501-22, General Code, includes not only court costs but also other expenses incident to the litigation with respect to which the court may make an award and finding. In our opinion, in addition to court costs, it includes compensation to the special master commissioner, stenographic and accounting charges, and compensation to counsel for the respective parties which may be properly chargeable to the income or the corpus.

The finding which we make in this matter embraces not only expenses heretofore incurred for compensation already fixed, but also compensation to the referee appointed by this court and any additional court costs or expenses incident to this litigation.

This court not only has statutory authority but has the inherent discretionary power to apportion the cost of the expenses of this litigation "as it adjudges to be right and equitable."

The Probate Court, by a proper order, allocated to the removal proceeding a certain portion of the costs and expenses allowed in the prosecution of both proceedings which were consolidated and heard together by the special master commissioner. However, the greater portion of the costs and expenses has been allocated to this proceeding.

This court, in the removal proceedings, case No. 4302, which was instituted on application of the life tenant, taxed all costs incident to that proceeding against the income of the trust on the ground that since the life tenant instituted the proceedings and failed to support her claims it was only fair and equitable that she pay the costs of that proceeding. The rule we applied in the removal proceeding has little or no application to this proceeding.

The referee found that all costs and expenses allocated to this proceeding should be charged to income on the ground that "the life tenant necessitated the litigation." The fact is that the proceeding was instituted by the trustee and not by the life tenant. True, the life tenant, in a letter under date of September 23, 1946, directed to the trustee, made a demand for the payment of income far in excess of that which was due her. However, the trustee instituted this action within ten days thereafter and alleged in his petition that "the plaintiff is in doubt and cannot safely proceed without the instructions of the court." Then he propounds numerous questions involving the administration of the trust from its very inception. The issues presented in this proceeding should have been presented to the court for determination at the time the trust was established. Mr. Landgrave, the bookkeeper, testified he told the trustee and also the life tenant that certain questions must be determined to enable him to set up the books so as to properly determine the correct amount due the life tenant. Mr. Landgrave also testified as follows:

"In our reports to the court we never told what may have been or what may not have been due to the life tenant on our records.

"We didn't know what that amount might be and so set it up as net profit — net worth and undistributed income, never determined it."

Mr. Landgrave testified further that until 1946 no distribution account was carried on the books; that it was impossible to tell how much was due the life tenant at the end of the year; and that he told the trustee that he (Landgrave) could not set up the books properly to determine these matters until certain other matters were determined. He also testified that it was the life tenant and not the trustee who first asked him to properly set up the books to determine the amount due her.

The record also shows that for the year 1945 she paid income tax on an amount which was far in excess of the amount she received in cash as distributable income. This income tax return was prepared in the early part of 1946, and it was this incident which provoked the life tenant into making a demand upon the trustee for a proper accounting of the amount due her. In view of the testimony of the bookkeeper and the failure of the trustee over a period of years to seek the instruction of the court with respect to questions which had arisen, and in view of the fact that this court has found that the trustee has not properly accounted for income due the life tenant and has charged certain expenditures to income which the income should not bear, we conclude that the life tenant was justified in pressing the trustee for a proper accounting in 1946.

The trustee, at the time of the establishment of this trust, should have had an appreciation of the questions involved, and it was his duty at that time to seek the instructions of the court and an interpretation of the will. If he had done so this protracted, expensive litigation would not have arisen. Therefore, we cannot concur in the judgment of the referee that the life tenant necessitated this litigation. Furthermore, conceding that the life tenant provoked the institution of this proceeding, this fact is not controlling and does not serve as a proper basis for making an award against income for the entire cost of the litigation. Some one party must always either institute an action or provoke the bringing of an action to determine an issue.

There is no provision in the will which controls the judgment of this court in determining against whom the expenses of litigation are properly chargeable or the manner in which the expenses should be apportioned between the parties. The court is constrained to do that which, in its judgment, seems to be just and equitable.

In 1 Restatement of the Law of Trusts, 685, Section 233, is found the following statement:

"f. Other expenses. Expenses other than ordinary current expenses are ordinarily payable out of principal. Thus, the trustee's commissions in respect of principal, the cost of effecting sales, exchanges or acquisitions of any part of the principal, are payable out of principal. Any tax levied by any authority, federal, state or foreign, upon profit or gain which is allocable to principal is payable out of principal, although such tax may be denominated a tax upon income by the taxing authorities.

"g. Expenses of litigation. Expenses incurred by the trustee in maintaining or defending an action to protect the principal of the trust property or to assure the title thereof are payable out of principal, since to the extent that the protection of the principal may have been of benefit to the beneficiary entitled to the income, payment of the expense from principal automatically throws part of the burden upon the interest of the beneficiary entitled to income. Expenses in maintaining or defending an action to protect only the income are payable out of income. Expenses in maintaining or defending an action to protect the principal of the trust property and income which has accrued at the time of the suit are allocable between principal and income." (Emphasis ours.)

This statement of the law indicates the controlling factors on the determinative issue. The court should apportion the cost and expenses on the basis of benefits received or should consider for whose protection the litigation was instituted.

In 33 American Jurisprudence, 951, Section 428, the text is as follows:

"Although the courts have rarely attempted to lay down any general rules for the determination of the proper source of payment of the expenses of litigation involving a trust estate as between corpus and income, in a few instances certain general propositions bearing on the question have been enunciated. It has been stated and requoted with approval that `the regular annual or periodically recurring expenses arising in the administration of a productive trust commonly are paid out of the income, while extraordinary and unusual expenses are chargeable against the capital. The costs of litigation generally fall in the latter class.' These rules apply in cases where the question concerns life tenants and remaindermen, both guiltless of any wrong against the trust, and where the point of incidence of proper expenses must be determined as between innocent persons." (Emphasis ours.)

In 124 A. L. R., 1183, there is an extended annotation covering this question. On page 1186, with reference to the question of charging the cost against the person who necessitated the litigation, we find this note:

"The irregularity with which this consideration has been held to control, however, prohibits its establishment as a general rule in connection with the solution of the question under consideration."

The annotation in A. L. R. covers cases where the cost of litigation is properly chargeable to income or to the corpus or apportionable between the income and corpus. One of the leading cases in this country is In re Estate of Gartenlaub, 185 Cal. 648, 198 P. 209, 16 A. L. R., 520.

Another leading case is that of Cogswell, Trustee, v. Weston, 228 Mass. 219, 222, 117 N.E. 37, which held:

"The regular annual or periodically recurring expenses arising in the administration of a productive trust commonly are paid out of the income, while extraordinary and unusual expenses are chargeable against the capital. The costs of litigation generally fall in the latter class. These rules apply in cases where the question concerns life tenants and remaindermen, both guiltless of any wrong against the trust, and where the point of incidence of proper expenses must be determined as between innocent persons."

The court in the Gartenlaub case, supra, on page 655, held:

"Where litigation becomes necessary to remove a doubt or ambiguity so as to insure the correct administration of the trust, the expense is an extraordinary charge, which, unless otherwise provided by the testator, should be borne by all parties. If the expense of litigation incident to the trust is paid from principal, the life tenant, as well as the remaindermen, shares the burden, for in that event the life tenant is deprived of interest on the sum taken from principal." (Emphasis ours.)

The author of this opinion, while serving as probate judge of Montgomery county, had this question for determination in the case of Reibold v. Evans, 28 Ohio Law Abs., 266, 3 Ohio Supp., 251. The court in that case relied on the statement hereinbefore quoted from the Restatement of the Law of Trusts and the cases of Cogswell v. Weston and In re Estate of Gartenlaub hereinbefore referred to. In the Reibold case, the court apportioned the counsel fees between the life tenant and the remaindermen. An appeal was taken to this Court of Appeals. The appellate court decision is reported under the style of Reibold v. Evans, 65 Ohio App. 123, 29 N.E.2d 369. On page 133, this Court of Appeals held:

"Considering the matter at issue, we find the opinion of the trial court in the case of Reibold v. Evans reported in 28 Ohio Law Abs., 266. The case is so well considered and is in such harmony with our own views of this matter that to repeat what is there said or to comment further upon it would be a useless task.

"The opinion of the court is detailed and consistent and well supported by authorities upon which we have checked and we therefore refrain from further discussion of the matter covered by the opinion.

"It will be noted that the opinion ends with the discussion of the proper allocation of attorneys' fees * * *."

Coming now to apportion the costs and expenses allocated to this litigation, the court must observe that the life tenant employed her own counsel. Counsel fees for the life tenant are not involved. The legatees and remaindermen employed counsel and substantial fees were fixed by the Probate Court. The services of counsel for legatees and remaindermen were rendered in the interest of the legatees and remaindermen. It is the opinion of this court that compensation paid or to be paid counsel for legatees and remaindermen should be charged one-half to the legatees and one-half to corpus. The trustee employed counsel to institute this proceeding and substantial fees have been fixed by the Probate Court for services rendered. We are of the opinion that the expenses of this proceeding are not ordinary current expenses which are customarily paid out of income. On the other hand, we are of the opinion that this proceeding is in the nature of extraordinary litigation affecting the rights of the life tenant, the remaindermen and the trustee. It was necessary that this proceeding be instituted in order to determine numerous questions which had arisen respecting the powers of the trustee, the right of the life tenant on the one hand and the protection of the remaindermen on the other. In such a proceeding it is neither just nor equitable that all of the expenses incurred by the trustee and the expenses incident to the litigation be chargeable to income. If we were to apply with full force the principle of law laid down in the Restatement of the Law of Trusts, hereinbefore quoted, that by charging the expenses to principal rather than to income both the remaindermen and the life tenant share the burden of such expenses, we would be justified in charging the entire expense against the corpus. However, in view of the situation which has developed in this litigation and having in mind the rights of the parties and the benefits accruing as a result of the litigation, we are of the opinion that it would be just and equitable to require the income and the corpus to share an equal burden with respect to compensation allowed the counsel for the trustee for services rendered or to be rendered in this litigation, for stenographic and accounting charges allowed or to be allowed, for compensation to the special master commissioner and the referee appointed by this court, and for other court costs.

The finding of the referee is set aside and a finding is made by this court in accordance herewith.

Part VII.

In whom is the legal title vested?

This question is not propounded by any of the parties hereto but it is touched upon in the briefs, and it is contended by the life tenant that item V of the will vests the legal title in the life tenant. True, in the first clause in item V, the testator gave all the balance of his property to his wife, in trust for her use and benefit for and during her natural life. However, these words must be read in conjunction with other provisions of the will in which he set up the trust and directed the trustee to manage and control the trust estate. The words in the first clause have the effect of giving to his wife a life income. The legal title is vested in the trustee by necessary implication. See City Trust Savings Bank, Exr., v. Hanley, 17 Ohio App. 467, 468, 469. It is essential that the court determine this question in order to avoid complications which may arise in the holding and passing of trust assets in the past and in the future, particularly as it affects real estate titles. A finding is made in conformity herewith.

Depreciation and Reserve.

We hold that the proper method of accounting with respect to replacements and additions such as machinery and equipment which will depreciate through use, is to charge the cost in the first instance to corpus, inasmuch as replacements and additions enhance the value of the corpus, and to place against the income a depreciation charge each year during the useful life of the article. Replacements and additions are given like treatment, both becoming part of the corpus, and are depreciated through use in the production of income. The corpus account is credited each year with the amount of the depreciation charge against income. If the life tenancy does not terminate during the useful life of the article, the life tenant has borne the entire expense, since the total amount of the annual depreciation charges against income will equal the cost of the article. If the life tenancy terminates during the useful life of the article, the life tenant has paid the proportionate share of the cost of the article, i. e., as the time during which the life tenant has received income through the use of the article bears to the total number of years of the useful life of the article. Thus the life tenant will receive the total amount of income due her for the accounting period.

The record shows that the trustee charged the cost of machinery and equipment to the capital account and depreciated the article according to the ruling of the federal internal revenue department, and charged the depreciation as an operating expense. It was the expert accountant who adjusted the records of the bookkeeper for the trustee by charging the cost to income at the time of purchase and allowed a depreciation credit to the life tenant each year during the useful life of the article.

However, the trustee now contends that he will experience financial difficulty if he is required to operate the trust as directed by this court. The trustee contends that since he has no working capital, and the net income is distributed to the life tenant, he is required of necessity to charge the cost of replacements and additions to income and give the life tenant a depreciation credit each year during the useful life of the article. As we have hereinbefore stated, we have rejected this method on the ground that it forces the life tenant to finance the operation of the trust out of income and therefore deprives the life tenant of a substantial portion of her income each accounting period. In our judgment this method is neither fair nor just to the life tenant, and is contrary to fundamental principles of trust law.

We do not believe the trustee will experience serious difficulty in operating the trust as directed by this court. We have found that the trustee has no power to purchase additions except machinery and equipment required to take care of the normal increase of trade. Had the trustee, in the conduct of the trust thus far, confined his purchases of replacements and additions to items required to take care of the normal increase of trade, it is our opinion he would have been able to conduct the trust by securing bank loans and mortgaging trust property. As a matter of fact the record shows that the trustee did obtain repeated bank loans and applied to the Probate Court for authority to mortgage the trust res. This is the accepted procedure to be followed by the trustee where there is no working capital. However, it is the duty of the trustee to find working capital. There are assets in the trust, exclusive of the laundry business, which may be liquidated and the proceeds placed in a working capital or reserve account. If a cash reserve account is set up by the trustee, it must be established by the conversion of corpus assets; the life tenant cannot be deprived of income for that purpose. See 2 Scott on Trusts (1951 Supp.), 116, Section 233.3, which reads as follows:

"Where a trust is created for successive beneficiaries, the trustee cannot properly set up a reserve out of income for future improvements. In re MacDonell's Estate, 325 Mich. 449, 39 N.W.2d 32 (1949); Matter of Adler, 164 Misc. 541, 299 N. Y. Supp., 542 (1937) (citing Restatement of Trusts, Sections 233, 239); Matter of Davies, ___ Misc. ___, 96 N.Y.S.2d 191 (1950)." See, also, Nelligan et al., Trustees, v. Long (1946), 320 Mass. 439, 70 N.E.2d 175, 170 A. L. R., 126, 132.

The Journal Entry.

An order will be made appointing an expert accountant to make an audit in accordance with the directions given herein, beginning with the administration of the estate by the executor and extending over the operation of the trust by the trustee to and including December 31, 1950, giving a separate account of the administration of the estate by the executor and annual accounts of the trust operation.

The court has not formulated definite and specific answers to the questions propounded, believing that it would be sufficient to lay down fundamental principles of law which are applicable and controlling and being satisfied that counsel will be able to draw the proper journal entry therefrom.

If further instructions are necessary a supplemental application may be filed for that purpose.

The finding of the referee is sustained in part and overruled in part.

Judgment accordingly.

HORNBECK, P. J., concurs.


I cannot concur with my associates in the determination of the amount due the life tenant under the terms of the will. Under item V she is entitled to all the income from the Atlas business "after the payment of operating expenses and taxes and other charges." It is in the definition of the words, "other charges," that the difference arises. The majority opinion seems to place no significance on these words, and gives them the same interpretation as was given the term, "operating expenses." In case of ambiguity or uncertainty in any provision thereof the entire will will be considered, and, if consistent, each and all of the provisions thereof are to be given full effect. Words deliberately used in the will are presumed to have been placed there for a purpose and cannot arbitrarily be ignored. They must be given a meaning that will give effect to the intention of the testator if such intention can be ascertained and no rule of law violated. See 41 Ohio Jurisprudence, 605, Section 470, and cases there cited.

In 67 Corpus Juris Secundum, 531, it is said:

"The word `other,' as defined by all dictionaries and lexicographers, has numerous and various meanings and various shades of meaning, depending on the context in which it is found. It is an adjective, and reference to dictionaries discloses many synonyms. It is a correlative and specifying word. While it is referred to as a word of addition, in its natural, usual, and normal use it indicates some thing or things in addition to, differing from, or both additional to, and differing from, the antecedent thing or things immediately in contemplation.

"It has been said that the word `other' ordinarily means different from, different, different in nature or kind, different from that which has been specified; different or distinct from the one or ones mentioned or implied; different person or thing from the one in view or under consideration or just specified; not the same.

"The word `other' also is defined as meaning additional or further; in addition to, and different from, those mentioned; not this or these. Another common use of the term `other' is as meaning one of two or more of a class."

It has been suggested that the doctrine of ejusdem generis has application here, but this maxim will not be followed where the preceding description is exhaustive so that there can be no more of the same kind. National Surety Co. v. Morris, Gdn., 111 Ga. 307, 36 S.E. 690.

The term, "operating expenses," is exhaustive and includes in general terms all deductions that may be considered in arriving at the net income of the business. In permitting the deduction of "other charges" in addition to the net income, the intention of the testator must be inquired into. The record reveals that Clay Thomas was operating a successful business at the Atlas laundry and that he had no working capital. An examination of the appraisement sheet discloses that if all the other assets were liquidated and only the Atlas laundry retained there would be a net deficit of $26,659.62 with which to have begun the plant operation. In operating a plant under these conditions Clay Thomas knew that all purchases of new machinery would have to be paid out of income. The will was executed approximately 14 months before his death, and the codicil, only two days before. No substantial change in the financial picture could have occurred in such a short period of time. Being cognizant of the financial condition of his affairs, he most assuredly would not have requested the trustee to operate a business under such conditions that it would have been impossible to succeed. It must have been for the purpose of assuring the success of the business that he authorized the deduction of "other charges" in arriving at the amount due the life tenant. It might be said that he could have borrowed money to operate the plant, but would any sound financial institution loan money to an organization which was obligated to pay its net income to a life tenant? I think this method of operation would have been impossible of performance. It is therefore my conclusion that the finding of the referee on this particular question should be affirmed.

I must also dissent from the majority opinion in charging to corpus the amount paid for goodwill in the purchase of the new businesses. The record reveals that the net income in 1941, before the purchase of The 5c Towel Supply Company and the Bowden Towel Supply Company, was $21,892.64, and in 1943, the year following the purchase, it was $58,340.66. In other words, net income was increased almost three-fold after the purchase of these new businesses. The business still continued to expand thereafter. The net income for 1944 was $61,019.37; for 1945, $79,119.09; and for 1946, the final accounting period, $95,423.76. I am in accord with the majority opinion that the purchase of the new businesses under the facts presented has become a proper charge but think that it should be against income and not principal. I am aware of the fact that in many jurisdictions it has been held that where expenditures in administering a trust fund tend to benefit both income and principal, the payment of expenses should be apportioned equitably between the two. Stevens v. Melcher, 80 Hun., 514, 30 N. Y. S., 625; In re Vermilye, 100 Misc. 235, 166 N.Y.S. 320; Matter of Kelsey, 89 Misc. 701, 153 N.Y.S. 1095; Rhode Island Hospital Trust Co. v. Waterman, 23 R.I. 342, 50 A. 389. But there is authority in Ohio for the proposition that, where permanent repairs are made to property for the purpose of conserving it and for the protection of income, the entire cost may be charged to income.

In the case of Frye, Trustee, v. Burk, 57 Ohio App. 99, 12 N.E.2d 152, at page 111, the court said:

"It is the duty of the trustee to preserve and conserve the properties of the trust estate for the purpose of producing income to provide means to make the payments provided for in the will; and in the performance of this duty the trustee has the right and power to use the income from the whole of the trust estate in making permanent and expensive repairs to properties of the estate, subject, however, to the condition that he shall not abuse his discretion in this respect * * *."

It is my opinion that the purchases of the new businesses, which were made in the exercise of the sound discretion of the trustee as a good business man, were in the nature of a permanent repair to the Atlas business, made for the purpose of keeping the business on a profitable basis and also for increasing the income for the life tenant. Therefore, I think the referee was correct in his conclusion that these purchases should be charged to income.

I am in full accord with the majority opinion on all other questions presented.

(Decided July 12, 1951.)

ON APPLICATION for rehearing.

Per Curiam. This cause is now submitted on application of the trustee for rehearing and for the right to introduce additional evidence by a banker and manufacturer bearing on the question of "depreciation and reserve," and for oral argument, and on the application of the legatees and remaindermen for rehearing and oral argument.

The questions involved in this case were orally argued to the court and fully presented in extensive briefs before the opinion of this court was written. Additional briefs were filed on the instant applications. No new questions are raised, and we do not believe oral argument is necessary in assisting the court to reach a determination of the matters presented on the applications.

The trustee requests the introduction of additional evidence to be given by a banker and a manufacturer bearing on the question of "depreciation and reserve." The purpose of such evidence would be to present more forcibly to the court the financial difficulty which the trustee may encounter in conducting the trust under the will as it has been construed by this court in its former opinion. This same contention was strongly urged in oral argument and briefs and was considered by this court. The will has been construed by this court from its four corners in order to ascertain the intention of the testator.

The trustee has contended that the will should be construed so as to give him as full and absolute control over the trust as if it were a business operated by a sole proprietor. With this contention the court does not agree, as stated in the former opinion. The testator may have had good and valid reasons for not giving carte blanche authority to the trustee. Most trusts are operated by trustees under limited powers, and this trust can be so operated. Should the trustee experience any financial difficulty in operating the trust, collaboration with the parties in interest, the life tenant and the remaindermen, will be necessary to the end that the trust may be profitably and efficiently operated for the best interest of all concerned.

This trust is conducted under the will of the testator and under the direction and control of the Probate Court. Inasmuch as there are contingent remaindermen whose interests must be protected, it is suggested that the proper procedure to follow when loans are to be made is to file appropriate applications in the Probate Court and give notice to all interested parties. The Probate Courts are constantly called upon to assist in solving such difficulties which arise in the operation of a trust. It may become necessary and it may be for the best interest of the life tenant that she assist in the creation of a cash reserve, or that she make personal loans to the trustee in order to assure a high level of operation and an ever-increasing income. We need not elaborate further on this matter as we are not required to state here the most acceptable method of financing the continued operation of the trust. We have every reason to believe that the trustee and the Probate Court will receive the co-operation of the life tenant and the remaindermen in the continued operation of the trust.

After re-examination of the former opinion of this court, and considering again the various contentions raised by counsel for the trustee, the legatees, and remaindermen, we are prompted to modify the former opinion in two particulars.

The first matter relates to "float." In our former opinion we stated that upon the termination of the trust an adjustment would be required between the life tenant and remaindermen with respect to the valuation of float and that no adjustment would be required during the continuation of the trust. We adopted the formula used by the Ohio Department of Taxation, and the court instructed the trustee to set up the books and apply this formula so that at each accounting period the rights of the life tenant and remaindermen would be reflected in regard to material not in inventory but in use. As pointed out by counsel for the trustee, this order, if carried out, would create a tax problem. Inasmuch as the rights of the life tenant and remaindermen are to be adjusted only at the termination of the trust, this court is now of the opinion that their respective rights in float need not be reflected by an accounting at the end of each accounting period, but only at the termination of the trust. Furthermore, we conclude that the formula adopted by the Ohio Department of Taxation, Intangible Tax Division, is just and fair under certain circumstances, and unjust and unfair under other circumstances, depending on whether the valuation of material not in use at the end of the accounting period is greater or less than the inventory of material not in use at the beginning of the accounting period and the comparative valuation between the inventory of the material not in use and the valuation of float at the end of the accounting period. Furthermore, other and different formulas may be in use at the termination of the trust, the date of which is uncertain. For this reason we modify our former opinion by not requiring the application of this formula. It is sufficient for this court to find that if the inventory of material not in use at the termination of the trust has a greater value than the inventory of material not in use at the beginning of the trust, such excess valuation will represent income, and that if at the termination of the trust the value of float is greater than the value of float at the beginning of the trust, such excess valuation will represent income. We prescribe no formula to be used in determining such valuation as we do not deem it necessary to make such an order under the issues presented.

The other modification relates to the finding of the amount due the life tenant, if any, after an accounting is made in conformity with the court's judgment. The court will impress a trust on the assets of the trust for any amount found due the life tenant.

The application for oral argument is overruled; the application for the right to introduce additional evidence is overruled; and the application for reconsideration of the court's opinion is sustained in part and overruled in part.

Judgment accordingly.

HORNBECK, P. J., and WISEMAN, J., concur.

MILLER, J., concurs in the modification but dissents from the order overruling the application for a rehearing.

(Decided December 26, 1951.)

ON APPLICATION for separate findings of fact and conclusions of law.

Per Curiam. There is now submitted an application of the trustee for separate findings of fact and conclusions of law.

The application for separate findings will be sustained. The findings of fact and conclusions of law which would be incorporated in a separate findings are set forth in the opinion of the court, dated April 16, 1951, and supplemental opinion, dated July 12, 1951. While the court did not intend these opinions to be separate findings of fact and conclusions of law, the drafting of such findings would simply be a repetition of much of the material contained in these two opinions. For this reason the court instructs counsel to prepare an entry journalizing the two opinions as the court's separate findings of fact and conclusions of law, which the court adopts as such.

The journal entry should reserve for further consideration the question as to the amount due the life tenant, for the reason that the amount due cannot be determined until a proper accounting has been had pursuant to proper principles of law.

An entry may be drawn accordingly.

Judgment accordingly.

HORNBECK, P. J., and WISEMAN, J., concur.

(Decided January 14, 1952.)

ON APPLICATION for reconsideration.

Per Curiam. We now have before us an application for a reconsideration of the court's order that the court's opinion and supplemental opinion be filed as a separate findings of fact and conclusions of law. The application is hereby denied.

Application denied.

HORNBECK, P. J., and WISEMAN, J., concur.


Summaries of

Holmes, Trustee v. Hrobon

Court of Appeals of Ohio
Apr 16, 1951
103 N.E.2d 845 (Ohio Ct. App. 1951)
Case details for

Holmes, Trustee v. Hrobon

Case Details

Full title:HOLMES, TRUSTEE, APPELLEE v. HROBON, APPELLANT; MANN ET AL., APPELLEES

Court:Court of Appeals of Ohio

Date published: Apr 16, 1951

Citations

103 N.E.2d 845 (Ohio Ct. App. 1951)
103 N.E.2d 845
61 Ohio Law Abs. 113

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