By his will Joseph W. Harper directed his real estate to he sold, and divided his estate into several shares to be held in trust by his executors for his wife and children, respectively, for life, one of the trusts being for his daughter, the plaintiff’s mother, viz., to invest her share (the same as the others) in public stocks or bonds of the State or city of New York, or of the United States, or in bonds and *416mortgages upon real- estate, for her benefit for her life,, ¡the' direction being that “ the interest, income and .profit of such share ” should be received by the executors and paid to the said daughter during iter life ; ’ and this is followed by a bequest of such share to the children of the said daughter upon her death.
A part of the share allotted for the said daughter in trust by the executors consisted' of United States bond’s owned by the testator in' his lifetime, and another part was invested in United States bonds by .the said executors, such bonds being purchased at a premium.
The market value (i. e., par plus premium) of those owned by the testator in his lifetime-was .$45,000, when placed in the said trust fund. A part of them were afterwards redeemed by the United StateS| government at par or thereabouts when the redemption time fell inland the rest of them were sold-, all at a loss of $4,575 on the . said former market value.
Those purchased "by the executors were afterwards redeemed by the United States government at a loss on the purchase price of $3,944.34,, except that some of them were sold- at a profit of $1,773.75, leaving a net loss of $2,170.59.
All of the interest on the said bonds was annually paid tó the said daughter.' No part thereof, and no other income, was accumulated in a sinking fund to make up the said loss thereon. The said daughter died in 1903 leaving the plaintiff and the defendant Rollin H. Ly ride her on-ly children or descendants. The plaintiff brings this action against bet executors to recover his one-half of the said loss.
In 1899 the trustees accounted, and this plaintiff objected, to the account-, which 'showed the above losses, .on the ground that all of the income should not have been, paid to the life beneficiary, but that enough should have been withheld by the trustees to create a ’ fund to make-up the impairment of the principal represented by the said losses, lie afterwards Withdrew his objections on the understanding of all concerned, that it should in no way .impair his right to recover-of the said life beneficiary or her estate his share as remainderman of such loss of principal, and this was .fully expressed 'in the surrogate’s decree settling the accounts, and the trustees were not charged with the said, losses. ,
On the final accounting after the said life beneficiary’s death,the plaintiff filed no objections, and the accounts were settled without *417charging the trustees or any one with such losses. Between the two accountings there was no loss of principal; it all occurred before the first accounting.
The principal of the trust estate had to be kept unimpaired for the remaindermen, unless there is something in the will itself, of in default thereof, in the surrounding facts dehors, from which, consistently with the language of the will, a contrary intention of the testator may be found as a fact. If such intention be not found, then it was the duty of the trustees to keep back each year out of the income from the securities purchased by them at a premium, a sum sufficient to make up for the gradual depreciation of such premium as the said bonds approached maturity, instead of paying the entire income to the life beneficiary, to the end that upon 'her death the principal should be unimpaired for the remaindermen (New York Life Ins. & Trust Co. v. Baker, 165 N. Y. 484 ; Matter of Hoyt, 160 id. 607).
There is nothing to go by in this case in ascertaining such intention of the testator except the will itself, no extrinsic facts being * proved. The language of the will is of the ordinary tenor for the investment of funds and the receipt and payment of the income therefrom by trustees to the beneficiary, and leaves no room to find as a fact upon it alone that the testator had any intentiqn of changing the rule of law that-the principal must be preserved unimpaired for the remaindermen. If the rule above stated of keeping the principal unimpaired may be departed from in this case it may be departed from in every case, unless the will expressly prohibit it.
If the will had directed that the interest on the securities in which the trust estate'is directed to be invested should be paid to the life beneficiary, then by the plain words of the will all of such interest- would have belonged to her. But the will did not so direct; it directed that' “the interest, income and profit of such ■ share,” i. <?., the share of the estate put in trust for her, be paid to her. The funds of such share invested by the trustee in- government bonds purchased at a premium did not produce net the interest paid on the said bonds, but only the said interest less the annual depreciation in the premium thereon. The payment of .the premium in the purchase was in fact a division of the interest between buyer and seller. This is a thing well understood b'y investors in *418securities, and the net income on such an investment is arrived at by an established calculation.
The case of McLouth v.Hunt (154 N. Y. 179) is not applicable to the present case, for the' bonds there considered were not purchased by the trustees, but were received by, them in kind from the testator. They were in the same category as any other property, of the testator, real or personal, which might fall in market value. The rule which we are discussing applies,, as I understand it, only to investments made by trustees, and I, therefore, do not altogether understand how the discussion arose in the McLouth case. The opinion even there, however, is careful to point out (p. 192) that the life beneficiary would be charged with the depreciation in premium in the case of investments by the trustees when he would not be in the case of investments by the testator.
The plaintiff had the right to elect to hold, the life beneficiary liable for the excess of income paid her instead of the trustees (Fowler v. Bowery Savings Bank, 113 N. Y. 450), and he did so on the first accounting of the trustees. On the last accounting, viz., after the death of the life beneficiary, he made no objection to the overpayment, and the accounts were settled without charging the trustees or any one therewith. But this is not res adjudicata of the question now here, for the reason, if no other, that between the first and second accountings there was no impairment of principal. It all occurred before the. first accounting, and the election of the plaintiff was made and his rights fixed thereon." . .
But the plaintiff cannot recover anything, for the depreciation of ■the market value of the bonds owned by the testator in his lifetime and turned over to this trust in kind in the division of the whole estate into the several trusts created by the will. The will did not mention any specific amount to go into each or any trust; it only directed a division of the estate into the several trusts, and the value or amount of the principal of this trust was not fixed by a money standard, but depended on the value of these bonds as they rose or fell. They do not stand in the same case as money of the estate invested by the trustees, as has already been pointed out.
The. judgment should be reversed.
Judgment affirmed, with costs.