FIRST DEPARTMENT, JUNE TERM, 1898. [Vol. 31. case it does not go to the other residuary legatees, as the testator has already indicated the extent to which he means them to share in the residuary estate. The income in question has not lapsed. The testator has directed what shall become of it in case the trustees do not transfer it to the beneficiaries, and his direction must be carried out. It has been argued that there was no general "body of the estate" in the hands of the executors at the time when the trustees were directed to make this payment. This argument rests upon the theory that the executors had already divided the residue of the estate into six equal parts, as provided by the will; and that the testator meant the residuary beneficiaries to take these shares as thus constituted no more and no less. It is true that he did direct the executors to make the division and distribute the shares; but no reason is apparent why he should not, by subsequent words, qualify these provisions by increasing the first four shares. It does not appear that the testator meant this initial division to be final and absolute. There is nothing so unusual about a subsequent increase of the shares as to justify putting a forced and unnatural construction upon the words "body of my estate." Furthermore, it is clear from the will that the testator contemplated, when this was made, at least, that the amount of the first four shares of the residuary estate might be increased, for he directed that in certain contingencies one-half of the remaining two-sixths should "fall back and become part and parcel of the residue of my estate." Thus, as to Jeremiah Crolly, he provides in the 11th clause of his will as follows: "But in case my said nephew Jeremiah should die without having become entitled as aforesaid to the payment or transfer to him of said one undivided twelfth part, then, upon his death, I direct the same to be transferred to his children then living, and to the issue of such as may be dead, per stirpes and not per capita; and in case he should leave no children or issue thereof, then the same shall fall back and become part and parcel of the residue of my estate," So, as to James Crolly, we find the following provision in the 12th clause: "But in case my said nephew James should die without having become entitled as aforesaid to the payment or transfer of said undivided twelfth part, then, upon his death, I direct the same to be transferred to his children then living App. Div.] FIRST DEPARTMENT, JUNE TERM, 1898. and the issue of such as may be dead, per stirpes and not per capita; and in case he should leave no children or issue thereof, then the same shall fall back into and become part and parcel of the residue of my estate." And as we have seen in the statement of facts he made a similar direction in certain contingencies with regard to two of the four-sixths disposed of in the 7th, 8th, 9th and 10th clauses. Hence any argument, based upon the theory that the testator did not mean to increase the shares of the residuary estate as at first constituted, falls to the ground. Stress is laid upon the fact that the words "residuary estate" are used in the will and "body of my estate" in the codicil. But in truth this fact bears in the plaintiff's favor. The testator did not mean that the income should go into the general residuary estate and be distributed accordingly, but that it should form part of the residuary estate not included within the trust fund. Thus the court below rightly decreed that Jeremiah Doherty was, and the plaintiff is, entitled to the unpaid balance of the $101,000 paid over by the trustees to the executors. Prior payment of this sum was properly decreed out of any funds in the hands of Daniel Devlin's executrix, or which are payable to her under the terms of the judgment. No accounting was necessary as a preliminary to this decree. There are no creditors of the Daniel Devlin estate; and the rights of creditors of Jeremiah Devlin's estate are fully protected by the judgment, which directs an accounting, payment to a receiver of such part of the debt of that estate as it may be able to pay, and distribution by the receiver in accordance with the judgment. The next question relates to that portion of the income which the trustees did not pay either to the executors or to the beneficiaries named in the 4th clause of the codicil. It is urged that payment by the trustees to the executors was, at least, discretionary, and cannot be enforced. We think not. The clause provides that the trustees shall "apply so much if any of the income and dividends to the use of * * * therefrom from time to time, and in such sums as may seem proper to them (the beneficiaries) or to pay such income or dividends or such part as they may see fit into the body of my estate," etc. There was clearly a discretion vested in the trustees as to the amount to - FIRST DEPARTMENT, JUNE TERM, 1898. [Vol. 31. be received by the beneficiaries named. We think, however, that there was no additional discretion to withhold from the estate what was not thus paid. Words indicating discretion are coupled with the provision in favor of the executors; but this discretion was not an additional one, but an alternative for the other. The trustees were at liberty to pay either to the beneficiaries or to the executors, as they should think best; but what they did not pay to the former they were bound to pay to the latter. The discretionary language used in the second alternative is but the complement to that used in the first. In other words, the entire income was to be disposed of in one way or the other, or in both ways. None of it was to remain unapplied. Upon the other construction there would be not only an illegal accumulation, but an accumulation for no purpose whatever. Clearly the testator did not mean the income to lie idle in the hands of the trustees while this power lasted. It follows that the actual transfer by the trustees to the executors is unimportant. There was an imperative power in trust, and the beneficiaries take in the same manner as though it had been executed. (Smith v. Floyd, 140 N. Y. 337.) Consequently all income received by the trustees prior to July 27, 1892, and not paid to the beneficiaries, belongs in equity to those persons among whom the executors should have distributed it had it been so paid. The same rule applies to income which should have been, although it was not, realized out of the trust estate, and for which in consequence the trustees, or either of them, were liable. This income was not paid to the beneficiaries named in the codicil, and all such income belongs to the persons specified. We thus agree with the learned court below as to the disposition of the income accruing up to July 27, 1892, the date of William Devlin's death. We have reached a different conclusion, however, with reference to that accruing between this date and August 11, 1893, when Jeremiah Devlin died. On July 27, 1892, the power to dispose of the income of the trust fund ceased. After that date neither the beneficiaries nor the executors were entitled to any of it, and it remained undisposed of. It consequently belonged, under the statute (1 R. S. 726, § 40; Id. 773, § 2) "to the persons presumptively entitled to the next eventual estate." We cannot agree with the learned counsel for the plaintiff that these persons App. Div.] FIRST DEPARTMENT, JUNE TERM, 1898. were the residuary legatees. The persons who take are those presumptively entitled at the time the income accrues, although the estate eventually goes elsewhere. (Kilpatrick v. Johnson, 15 N. Y. 322, 326, 327; Schettler v. Smith, 41 id. 328.) Who were pre sumptively entitled to the principal of the trust fund between July 27, 1892, and August 11, 1893? During this period Jeremiah Devlin was vested with a power to dispose of the principal of the trust fund among such "relatives" of Daniel Devlin as he should see fit. Until the end of the period it could not be told with certainty who those persons would be, since he made the appointment by a will which took effect only upon his death. We think, however, that these interests vested under the power before his death. It is settled that where a power of appointment is conferred, and the property to be disposed of and its recipients are both certain, the latter obtain vested rights which cannot be destroyed by the nonaction of the donee of the power. (Dominick v. Sayre, 3 Sandf. 555; Smith v. Floyd, supra.) This rule has often been applied by the English courts where there is a power to appoint among "relations," a word which is analogous to that used in the case at bar. In such cases it is impracticable to appoint among all the relations, and the court confines itself to those persons who come within the description of next of kin. (Harding v. Glyn, 1 Atk. 469; Birch v. Wade, 3 V. & B. 198; Coie v. Wade, 16 Ves. 27.) But it is held, not that the property passes under the Statute of Distributions, but that the court executes the power in the manner specified. As was said in Harding v. Glyn, the donee's failure to appoint "shall not make the devise void, but the power shall devolve on the court; and though this is not to pass by virtue of the Statute of Distributions, yet that is a good rule for the court to go by," and the later cases adhere to this theory. We think this rule must be deemed to have been adopted in this State. In Dominick v. Sayre (supra) Judge DUER referred with approval to the English cases, but declined to apply the rule to the case of an appointment among the testator's family, holding that this meant his own immediate family, as to which there was no uncertainty. In this he deviated from the English rule, which does not make the distinction (Cruwys v. Colman, 9 Ves. 319); but so far as the rule applies to a power to appoint among "relations" it was fully approved. The rule was FIRST DEPARTMENT, JUNE TERM, 1898. [Vol. 31. also recognized in Gallagher v. Crooks (132 N. Y. 338, 343), where the cases were cited, and the court said: "It is well settled that the word (relations), when used in wills relating to personalty, only embraces persons within the Statute of Distribution." It follows that those relatives of Daniel Devlin, comprised within the class of his next of kin, obtained a vested interest in the principal of the trust fund under the power in the 4th clause of his codicil, subject only to be diminished or defeated by a different appointment by Jeremiah Devlin; consequently these relatives were entitled to the next eventual estate and the undisposed of income belongs to them. They take per capita not per stirpes (Dominick v. Sayre, supra, 571), and those who comprise the class at the time the income accrues are entitled to it. (Kilpatrick v. Johnson, supra, 326, 327.) In this case the income which was illegally accnmulated was given to the children of certain of the testator's daughters upon the death of the latter. DENIO, J., said: "I am of opinion that they take the whole of the interest upon their mother's shares during the time they continue to be thus presumptively entitled. As to the children born subsequent to the testator's death and those yet to be born they are to come in and share in the income which may accrue after they become presumptively entitled to a share of the next eventual estate in the principal of the fund.” We think the court below rightly disposed of the proceeds of the sale of the water lots. These were two lots upon which the trus tees originally held two of the Phillips mortgages, aggregating about $25,000. In 1885 the mortgages were foreclosed and the trustees bought in the property. In 1893 Jeremiah Devlin, as surviving trustee, sold it to the defendant Felix for a sum less than the principal and interest of the original mortgages. The judgment directs that the proceeds of sale be apportioned between the principal and income of the trust fund in the ratio which the aggregate principal of the mortgages bears to the whole unpaid interest. This was correct. The land represented the original investment in the mortgages, and its proceeds should be distributed in the same manner as though the mortgages were being foreclosed for the first time for the amount of the purchase price. It is well settled that where the interest upon mortgages is unpaid, and the premises are eventually sold, the sum received should be ratably apportioned between |