Misc.] Surrogate's Court, New York County, May, 1920. and clearly proved to have been invested in the land. There must be a direct and unbroken connection between the two. The funds must be The funds must be "ascertained, traced and identified." There is no presumption that a trust fund in the hands of a fiduciary for many years and undisposed of at death is part of his estate. Ferris v. Van Vechten, 73 N. Y. 113; Cavin v. Gleason, 105 id. 256; Matter of Hicks, 170 id. 195, 198; Rastetter v. Hoeninger, 214 id. 66, 74; Jaffe v. Weld, 155 App. Div. 110. As the administrator has not proved that the real estate held by the decedent was purchased with funds of the estate of John Early, deceased, such real estate will not be presumed to be held in trust for the legatees under the will of John Early. Indeed the administrator does not claim all the property as belonging to the John Early estate, but he has elected to treat the amount due the estate of John Early as a debt by setting forth the amount alleged to be due in his affidavit and transfer tax schedules (Schedule B 3). The debt due from the estate of Mary Early to the estate of John Early and to the latter's legatees under his will is a proper deduction herein. Matter of Wheeler, 115 App. Div. 616; Matter of Westurn, 152 N. Y. 93. An examination of the account filed reveals that only about $80,000 worth of real estate had been purchased by the executrix between 1891 and 1904, when the trust terminated. During the following thirteen years, until her death, the further sum of $125,000 was invested in property by her. Charles Early became twenty-one in 1896, his brother in 1895 and his sister in 1900. The beneficiaries lived with their motherCharles and his sister lived with her up to the time of her death. They knew of the various investments, and although the latter might have been illegal and contrary to the will of their father, the knowledge of the Surrogate's Court, New York County, May, 1920. [Vol. 112. children, and particularly the accurate knowledge of Charles Early, as revealed by his testimony, and the fact that he has been an attorney-at-law since 1899, convince me that they were fully aware of the way their mother handled the estate, and are responsible for the result. Ungrich v. Ungrich, 131 App. Div. 24, 29. Charles Early, in one of his letters in the record, said: "For many years I have assisted my mother in the management of her affairs." The children had helped in obtaining money to finance part of these transactions, they permitted her to collect the rents, and they are, therefore, bound by her acts and conduct. In this case there was an acquiescence by the children of at least thirteen years, and in the case of Charles Early of twenty-one years after coming of age. From long silence "there is a presumption of fair dealing which overrides any presumption of wrongdoing growing out of the trust relations of the party.' Geyer v. Snyder, 140 N. Y. 394, 402; Barry v. Lambert, 98 id. 300. See, also, the excellent opinion of Ketcham, S., in Matter of Union Trust Company, 86 Misc. Rep. 394; affd., 219 N. Y. 514. It is the law that a trustee shall not invest fiduciary funds in his own name and that he shall not mingle the funds of a trust with his own or the funds of another trust. These rules have been strengthened by the recent enactment of section 2664-a of the Code of Civil Procedure, making such acts criminal. Anderson v. Fry, 123 App. Div. 46, 60; affd., 194 N. Y. 515; Shiverick v. Bonsall, 185 App. Div. 338. Mrs. Early's conduct as trustee in doing so was improper and illegal, but she seems to have acted with good intentions, and for the welfare of her family. Mrs. Early admittedly possessed a large amount of cash in 1891 when she took over her husband's estate. Mrs. Early also had a separate income from certain property Misc.] Surrogate's Court, New York County, May, 1920. owned by her personally in Fifteenth street and admitted by Charles Early not to be part of his father's estate. It is stated by him that the amount of rents collected by her from this property alone amounted to $9,436.46. The surplus income of Mrs. Early from her share of John Early's estate, and her other funds, went with any moneys that might have been used from the trust estate into the properties held by her at the time of her death. She was a thrifty woman and singularly successful in her business operations. She made no will in favor of strangers, but permitted all the property to pass in equal shares to her children. If it were not for the transfer tax to be collected, the issues here would be academic, as the creditors of Mary Early, the legatees of John Early, and the heirs and next of kin of Mary Early are the same persons, and all the property of both estates is now vested in them. In view of the facts stated, I have adopted the rule here that Mary Early, as executrix, was liable for the principal of her husband's estate, and not for the profits arising from her real estate operations. In Holmes v. Gilman, 138 N. Y. 369, 378, 379, the court said: "Where moneys have been misapplied and have been used as a portion of a larger amount which has been invested in other property, the property thus acquired does not as a whole belong to the owner of the moneys misapplied. It does not belong to him because it has not been purchased or acquired wholly with his moneys or funds, and hence it is that such property is held charged with a lien at least to the amount of the trust funds invested in it." "If money to which one person is legally or equitably entitled is wrongfully mingled by another with money of his own, so that the whole forms one indistinguishable mass, two courses are open to him who is wronged: (1) He may assert an Surrogate's Court, New York County, May, 1920. [Vol. 112. equitable lien on the entire fund for the amount of his money, or (2) he may claim that the delinquent is holding for him * a portion of the commingled fund proportioned to his contribution thereto." Madison Trust Co. v. Carnegie Trust Co., 167 App. Div. 21. In Bushe v. Wright, 118 App. Div. 320, 328, Laughlin, J., the court said: "He at most had a claim for an accounting, with possibly the right to have part of the amount found due declared a lien on the lands purchased by the deceased executor in his own name individually with trust funds." This court must therefore separate her personal estate, upon which a tax is justly due the state, from the amount due her husband's estate. The financial statement of the indebtedness filed is not in the form required for an account by the Code or by the practice of this court. Detailed items of receipts and disbursements are not given, and because of the fact that the previous order did not require the appraiser to report his findings, the burden of analyzing the accounts, covering a period of twenty-six years, and making conclusions has been placed upon the court. The adminisistrators might properly be directed to file an account of the acts and conduct of Mary Early in form capable of judicial settlement. Code Civ. Pro. § 2510, subd. 3; Id. § 2721. I have decided, however, in order to save the expense of an accounting to the estate and to terminate this long litigation, to accept the informal account filed by the administrator in the transfer tax proceeding. It recites that the principal to be accounted for is $136,349.45. I have allowed as correct the amount of her inventory $54,365.34, and additional assets received by Mrs. Early, $27,984.08. From this amount I have disallowed the sum of $10,000 realized in 1905 upon mortgage on Nos. 582-584 Seventh avenue Misc.] Surrogate's Court, New York County, May, 1920. - and the further sum of $43,000 realized in 1911 from the proceeds of the mortgage on property Nos. 200– 202 West Thirty-ninth street. These items, really profits, are not proper surcharges because the properties, as shown elsewhere in this opinion, are not deemed to be the properties of the estate of John Early, and the theory adopted by the court is that the principal of the trust fund and interest are to be allowed as a claim against the estate. In this case, however, the income far exceeded legal interest on the corpus of the estate. Price v. Holman, 135 N. Y. 124, 133; Ungrich v. Ungrich, supra; English v. McIntyre, 29 App. Div. 439, 447. The elimination of these items reduces the principal of the estate with which Mrs. Early was chargeable to $83,349.45. In the same exhibit the revised net income of the estate from 1891 to 1917 is stated to be $332,034.05. This amount is excessive. There should be deducted the charge against Mrs. Early for reasonable value of the rental of the premises No. 54 West Forty-sixth street at the rate of $2,800 per year, or approximately $74,900. This parcel had been the home of John Early and his family, and after his death was occupied by his widow and her children. His will gave the household furniture to her. Charles Early resided there from 1891 up to the time of his mother's death. When he reached the age of twenty-five, in the year 1900, he became entitled under the will of his father to a twoninths interest in all the property. His sister and brother likewise became entitled to the same share upon arriving at that age. Under the Real Property Law (§ 101) a two-thirds interest in the home and the other real estate left by the father vested in fee in the children at that time. The authority of the executrix to collect rents and income for them was terminated therefore in 1904, when the youngest child reached |