All parties to this appeal concede the general rule that the expenses incurred by trustees in defending a trust are payable out of the corpus of the estate.
The parties hereto, however, all desired that the corpus of the trust involved should be' relieved from the payment of the large expenses incurred in defending it. • The only issue between the plaintiff and the defendants was whether that expense should be paid out of the five per cent which the cestuis que trusterit were to receive annually or out of the large surplus of dividends arising from the stock held in trust.
The issue tendered to the referee by the parties — the defendants by their account, which charged the five per cent with these expenses. *24and the contesting allegations of plaintiff 'thereto,, which alleged that these expenses should be paid out of that part of the general income which went to fhebtrustees individually and were not chargeable against any beneficiary receiving but five per cent — did not involve the question whether the corpus of the fund should pay the éx-penses, but only which fund- of income should be chargeable with, them. The parties selected their own issue and narrowed'it to this simple question. I do not think the court should strive to fasten .these expenses upon the five per cent fund simply because the corpus eventually passed to the samé persons who received the five per cent per annum. The referee decided as .between these two funds,, both made up of income, that the larger surplus fund which went to the trustees individually, should bear these expenses rather than the five percent, which was in the nature, of an. annuity payable to- the céstuis que trustent annually. I think he was right in so. holding. The fair interpretation of the trust provision, made by' the_ testator in his will was that the five per cent should be practi¿ally an annuity. The-testator must have known that the stock which he was placing in' trust by his will paid much more than five per cent annually, for about, the time of his death' a dividend fifteen per cent was declared thereon. ,
If this five per cent is .to be treated as a simple annuity, from anything that appears in the record the ,annuitants cannot be made to pay the expense of defending the trust. They had a right to attack the trust as well as the defendants had a right,to defend it. The annuitants, although defeated, were not punished by even having the taxable costs of that action charged against them personally, but such costs were directed to be paid “ out of the income of the fund.” (Steinway v. Steinway, 163 N. Y. 183.)
I concede that it is straining the language giving to the trustees individually the excess of annual income ovér five per centum “ as their compensation for the management of such shares, and such excess^” to say that the testator meant they should pay all expenses connected with administration out of such excess. On the other hand, it cannot .be said that the testator intended, that the five per cent should be chargeable with such expenses. The defendants having voluntarily eliminated the corpus of the fund from bearing such expenses,, there remains* only the surplus of inepme from which it can be paid; *25and as between the two, I think'that fund which.went to the trustees for managing the estate should be charged with it.
All concur in the view that the other questions raised were properly disposed of by the referee, and I think the judgment should be affirmed without any modification.
Judgment modified as directed in opinion, and as modified affirmed, without* costs. Settle order on notice.