The expenditure for the defense of the former suit is not of a kind to bring it within the expenses of “ management,” fdr which the gift of the excess income was made to the defendants. It is equally evident that, it is not properly a charge-,upon the annual’ income given' to the beneficiaries. The proper method ' of reiin-" bursing the. trustees, it being admitted that they should be reimbursed, would have - been to have paid these expenses out of" the x corpus of the trust. This would- have required a sale of- enough shares to pay the amount. ' This- all the, parties agreed should hot be done, all being interested evidently in keeping the shares in the family, and so it was agreed that the expenses should be.paid out of the income. It being so agreed between the.parties that payment should, not be made Out of the corpus, the question of whether it should be paid out of the income payable to the beneficiaries or the excess income which was payable to the trustees must be determined on equitable principles.
*23It is admitted that the excess income is more than sufficient to defray all the expenses of defending the former suit, and so payment out of the gross income will be virtually a payment out of the excess income given to the trustees. If, however, the payment is made out of the income given to the beneficiaries, while this is not in accordance with the terms of the trust, a result is reached which is more nearly like that which would have been effected if payment had been made out of the corpus. The beneficiaries of the annual income of five per centum are the ultimate donees of the trust shares. By payment, out of the corpus they would, in the first instance, therefore, have borne the entire burden. The excess income thereafter due the trustees would have been only slightly diminished by the sale of some of the shares to cover payment of these expenses, and the annual income of the beneficiaries would have been correspondingly diminished, as the gift to them was five per centum on the par value of the trust shares annually. As the burden should properly have fallen upon the beneficiaries, it seems more in accordance with equity that they should bear the burden out of their annual income under the trust, it being agreed that the payment should be out of income rather than corpus, than that the burden should fall 'upon the trustees who were obliged to defend their trust, and who, for the good of all, entered into this agreement for the preservation of the trust shares intact.
McLaughlin, J., concurred.