Tbe following opinion was filed June 4, 1912:
ViNJE, J.Tbe appeal of Mrs. Gamer on presents these questions: (1) When did tbe trust estate rest — at tbe time of tbe death of tbe testator or at tbe time of tbe partial division of tbe estate, December 30, 1909 ? (2) Should corpus bear tbe loss of tbe Bigelow defalcation? (3) Should tbe National Surety Company’s dividend of $250,000, declared in January, 1911, go to life tenant or remainderman, or partly to both? (4) Was tbe First National Bank dividend of $532,617.12, declared in May, 1911, in fact a dividend, or did it remain corpusf (5) If a dividend, was it derived from profits earned since tbe trust estate vested ? and (6) Should corpus pay one half the compensation awarded tbe trustee? Tbe appeal of Mrs. Payne challenges tbe correctness of the finding that tbe dividend of the St. Paul Avenue Improvement Company of $100,000 declared in January, 1911, was paid out of corpus.
Before taking up these questions in detail it may be well to consider briefly tbe general scheme of tbe testator’s will. It clearly contemplates three distinct periods of administration of tbe estate by tbe executors and trustees: First, tbe period of tbe settlement of tbe estate, during which time it is to remain in tbe bands of the executors. This period was by the codicil limited to five years from tbe death of tbe testator, unless bis widow and sister should desire it to remain unsettled for a longer period of time. During tbe period of settlement specific annuities are required to be paid tbe widow and sister and others, and no provision is made for tbe disposition of income. It therefore goes to corpus during such period. The testator died October 4, 1904, and the estate was settled February 5, 1906, and then assigned to tbe trustee, George *373P. Miller. Second, the period elapsing between the settlement of the estate and the partial division thereof as required by subdivision 7 of paragraph 8. This period was limited to three years from the time of the'settlement of the estate, or to the time of the widow’s death should it occur earlier. During this period specific annuities were to be paid the widow and sister and others, and the net income in any one year to be paid seventy-five per cent, to the widow and twenty-five per cent, to the sister. At the end of this period, after the payment of certain specified legacies, one half of the estate was to be assigned to the widow, one quarter to the sister, and one quarter retained by the trustees, and the net income thereof paid to the widow during' her life, and upon her death to assign the principal to his sister, should she survive the widow, otherwise to his sister’s son, Winfield H. Qameron. The partial distribution of the estate took place December 30, 1909. Third, the period between the partial distribution of the estate and the death of the widow, during which time the trustees were to hold one quarter of the estate and pay the net income to her.
From the time of the settlement of the estate to the time of the partial distribution thereof all net income received was paid seventy-five per cent, to the widow and twenty-five per cent, to the sister, as directed by the will. Since the estate was divided in specie and the division of net income and of estate go to the widow and sister in the proportion of seventy-five per cent, to twenty-five per cent, (including in widow’s share the one quarter of the estate held by the trustee for her use), it becomes immaterial to ascertain how much, if any, of the dividends in question were earned prior to the partial distribution of the estate; for after such partial distribution the widow is entitled to the net income of seventy-five per cent, of the estate — the fifty per cent, assigned to her and the twenty-five per cent, held by the trustee, — and the sister is entitled to the income of her twenty-five per cent, of the estate, *374which is just in the same proportion in which they shared net income prior to the partial distribution. In other words, the percentage of stock from which they derive income after the partial distribution is just the same as the percentage of income they had from the stock before such distribution.
Aside from specific legacies and annuities mentioned in the will of the testator, the whole estate held by the trustees was to be assigned to the widow and sister, one half to the widow and one quarter to the sister, at the time of the partial distribution, and the other one quarter to the sister upon the-death of the widow, should the sister survive, and, if not, to her son, Winfield H. Cameron. There is a direct specific devise of the estate to the trustees for the purpose of so disposing of it. Such devise, in the absence of any language in the will evidencing any intention to postpone or delay the time it is to take effect, must be regarded as vesting the estate in the cestuis que trustent at the time of the death of the testator. Patton v. Ludington, 103 Wis. 629, 79 N. W. 1073; Matter of Brown, 154 N. Y. 313, 48 N. E. 537. There is no uncertainty as to who are the cestuis que trustent. They are specifically named in the will. Three quarters of the estate was to be assigned directly to them within three years of the settlement of the estate without any intervening estate in any one, and the other quarter was subject only to the life estate of the widow. They were all in being, at the time of the death of the testator. The widow had the immediate right to the possession of one half the estate upon the partial distribution thereof. The sister had the immediate right to the possession of one quarter of the estate at the same time, and to the other quarter upon the termination of the life estate of the widow therein. There is nothing in the will to make the persons to whom, or the events upon which, the estates are to take effect, uncertain. Their estates therefore vested at the time of the death of the testator. In Venner v. Mauer, 133 Wis. 325, 113 N. W. 663, it was held that “where a will pro*375vides for the payment of interest on a fund to a legatee till a specified time, and then for payment of principal to him, the presumption is, nothing appearing convincingly to the contrary, that the purpose of the testator was that the right to the fund- itself should vest in such person at the time of the vesting of the right to the use.”' Page 335. In the devise of the estate to the widow and sister the element of time was not annexed to the devise itself as a condition precedent thereto, but was annexed merely to the time of the assignment thereof. The devise was absolute, and was to be enjoyed at a fixed time in the future. It therefore vested when the will took effect, namely, at the time of the death of the testator. Ohse v. Miller, 137 Wis. 474, 119 N. W. 93.
It appears that during the administration of the estate the executor, George P. Miller, paid .to the First National Bank of Milwaukee $66,666.67, being the amount assessed upon the 1,000 shares of capital stock of said bank belonging to the estate. An assessment of sixty-six and two-thirds per cent, was levied by the stockholders of said bank upon all the capital stock thereof in order to make up the amount by which the capital of said bank had been impaired through the defalcation of its president, Frank G. Bigelow, who was named as an executor and trustee of the will of Henry 0. Payne, but who resigned and left the trust to be executed by the present trustee, George P. Miller. The payment was made by the executor out of the corpus of the estate in his hands, and was in his account charged against corpus. The claim made by the defendant Mrs. Gcvmeron is, that no profits declared by the bank should be paid the life .tenant until the loss of the defalcation was made good from the earnings thereof. This is but another way of stating that the loss should be borne by the life tenant and not by the remainderman. The executor properly charged the loss to corpus. It was the capital of the bank — the corpus of the estate — that sustained the loss occasioned by the defalcation. By reason thereof the remain-*376derman sustained a loss of $66,666.67 of capital and the life tenant sustained tbe loss of the income wbieb would otherwise have been paid her out of that sum bad it not been lost. It was not therefore necessary to reimburse the estate this amount out of earnings before dividends declared on the stock held by the trustee could be paid to the life tenant.
The St. Paul Avenue Improvement Company was incorporated in 1899 with a capital of $100,000 “for the purpose of buying and selling real property, improving and leasing the same, and doing of all other things which pertain to business of like nature.” All the original subscribers, except one, were directors of the First National Bank of Milwaukee, and, for the purpose of helping said bank out of a difficulty, had taken over its interest in certain lands situated on or adjacent to St. Paul avenue in the city of Milwaukee. It was the intention of said directors to hold the lands until a favorable opportunity to sell presented itself. Upon the organization of the St. Paul Avenue Improvement Company the interests in said lands acquired by the directors were transferred to the company and it assumed all the indebtedness. It is stipulated that the lands were taken over by the company with the intention of managing them and disposing of them as soon as possible, paying up the indebtedness of the company, and dividing the proceeds that remained among the stockholders. In February, 1911, the company increased its capital stock to $200,000, the original incorporators taking their pro rata shares in such increase of the capital stock. Since that time its capital stock has been and now is $200,000'. At the time the properties were acquired by the company they were largely unimproved and unproductive. The increase of the capital stock of the company was used prior to the death of Mr. Payne for the purpose of erecting buildings on the properties and in making other permanent improvements. Since the death of Mr. Payne no additional lands have been purchased nor have any buildings been erected on the company’s *377properties, with the exception of one building at a cost of $25,000. But since his death .and down to the time of the declaration of the fifty per cent, dividend in question, the net income from the properties of the company from rents, interest, and dividends on stocks owned amounted to $47,540.65.
In December, 1905, the company made a contract with the Minneapolis, St. Paul & Sault Ste. Marie Eailway Company for the sale of certain lands to it. It appears that the deal was not closed until sometime in January, 1911. January 4, 1911, the board of directors of the St. Paul Avenue Improvement Company passed the following resolution:
“Mr. Mariner reported that he had closed the deal with the Minneapolis, St. Paul '& Sault Ste. Marie Eailway and had conveyed to the Terminal Eailway Company the lands which this company had previously contracted to convey and that he had received from it $105,318.75 and moved that the board of directors declare a dividend of 50 % upon its capital stock, payable immediately to its stockholders, which motion seconded by Mr. Pfister and unanimously carried.”
It is further stipulated as a fact between the parties that the money distributed to the stockholders of the St. Paul Avenue Improvement Company as such fifty per cent, dividends were funds received from the Terminal Eailway Company as the final payment upon its land contract for the purchase of a part of the properties of the St. Paul Avenue Improvement Company, which was entered into about December, 1905. This dividend of fifty per cent, was paid in cash and was the only dividend ever paid upon the stock of that company since its organization.
It is urged on behalf of Mrs. Pa/ynQ that the St. Paul Avenue Improvement Company was organized for the purpose of dealing in real estate as a commodity, and that as such it had only two sources of profit, one being the net earning^ of the company which are produced when" the receipts from the properties exceed the carrying charges thereon, and the other, profits from the sales of its properties at -figures in excess of *378tbe cost thereof; and that both such sources of profits are to be considered as tbe earnings of such company. In support of this, reliance is placed upon Read v. Head, 6 Allen, 174; Balch v. Hallet, 10 Gray, 402; Oliver's Estate, 136 Pa. St. 43, 20 Atl. 527; Thomson’s Estate, 153 Pa. St. 332, 26 Atl. 652, 653; In re James, 146 N. Y. 78, 40 N. E. 876.
In behalf of Mrs. Conner on it is claimed that while the articles of incorporation authorized the St. Paul Avenue Improvement Company to buy, sell, improve, and lease real estate of all kinds, yet it was not in fact a trading corporation in real estate; that it took these lands for the purpose of disposing of the same as soon as practicable and at such an advance in price as it might be able to obtain; and that the moneys received from the railway company for these lands represented simply an enhancement of the value of the corpus of the capital of the company, and not earnings in the true and ordinary sense of that term.
We deem the latter claim well taken. Any dividend derived from a mere enhancement of the value of assets representing i capital from sources other than the accumulation of earn¡ings belongs to the remainderman and not to the life tenant. It represents corpus, not income. Kalbach v. Clark, 133 Iowa, 215, 110 N. W. 599, 12 L. R. A. n. s. 801; Holbrook v. Holbrook, 74 N. H. 201, 66 Atl. 124, 12 L. R. A. n. s. 768; Hite’s Devisees v. Hite, 93 Ky. 257, 20 S. W. 778, 19 L. R. A. 173; Outcalt v. Appleby, 36 N. J. Eq. 73; Gray v. Darlington, 15 Wall. 63; Eisner’s Estate, 175 Pa. St. 143, 34 Atl. 577. To this rule there is a well known exception in the case of a corporation engaged in buying and selling real estate at a profit, and if the St. Paul Avenue Improvement Company could be considered a trading corporation in real estate within the meaning of the exception to the rule stated, the profits accruing to the corporation, whether derived from an enhancement in the value of real estate or from rents and profits in excess of cost of maintenance, would be considered *379income and belong to tbe life tenant. True, tbe articles of incorporation of tbe company authorize it to buy, sell, improve, and lease real property, but it appears from tbe stipulated facts that tbis property was taken over by some of tbe directors of tbe First National Bank for tbe specific purpose of aiding tbe bank, and for tbe further specific purpose of bolding and disposing of tbe same at tbe earliest opportunity and to tbe best advantage; that tbe company never bought any real estate after tbe death of Mr. Payne; that it sold property from time to time when it could do so to advantage; that its sole purpose was to close out all tbe properties as soon as practicable, distribute tbe proceeds among its stockholders, and dissolve tbe corporation. We have therefore come to tbe conclusion that tbis property was held by tbe corporation the same as any other property is held by an individual or corporation that desires to sell tbe same at an advantageous price, in tbe meantime making some improvements thereon and leasing tbe same to tbe best advantage. We deem that tbe company was not such a trading corporation in real estate as is referred to in tbe cases cited by counsel for Mrs. Payne.
It is urged that at least forty-seven per cent, of tbe dividend declared should go to tbe life tenant, because it appears from tbe undisputed facts that at the time tbe dividend was declared tbe net income from tbe properties of tbe company from rents, interest, and dividends on stocks owned amounted to $47,540.65, and that therefore it must be assumed that this amount of money derived from admitted earnings was included in tbe dividend declared. Tbe difficulty with tbe claim is that it was stipulated by tbe parties that “tbe money distributed to tbe stockholders of St. Paul Avenue Improvement Company as such fifty per cent, dividend were funds received from Milwaukee Terminal Railway Company as a final payment upon its land contract for tbe purchase of part of tbe properties of St. Paul Avenue Improvement Company which was entered into about December, 1905.” It therefore *380appears that, while the company had funds derived from earnings out of which a dividend might be declared, the dividend in question was not declared out of such funds. We are here called upon to determine what disposition the trustee shall make of the dividend actually distributed. The fact that the company has on hand earnings out of which a dividend may hereafter be declared is immaterial so far as the present question is concerned. It follows, therefore, that the trial court properly held that the dividend of $100,000 declared by the St. Paul Avenue Improvement Company belonged to corpus and not to income.
Counsel for Mrs. Cameron admits that if it should be held that the trust estate vested at the time of the death of the testator, then the dividend declared by the National Surety Company should go to Mrs. Payne, as the undisputed proof shows it has been earned since that time. The conclusion reached as to the time of the vesting of the trust estate, and the admission of counsel, based as it is upon the undisputed facts, dispose of such dividend in harmony with the conclusions reached by the trial court.
the dividend of $532,611.12 declared by the First National Bank of Milwaukee to its stockholders on the 15th day of May, 1911, was charged against and paid out of the undivided profits of the bank. The fact, however, that it was charged against and paid out of a fund denominated undivided profits, is not conclusive between the life tenant and remainderman. Soehnlein v. Soehnlein, 146 Wis. 330, 131 N. W. 139. The claim is made in behalf of Mrs. Cameron that the dividend was never properly segregated from the corpus of the capital of the bank, because it was used to purchase a trust company which became an ancillary institution to it, and that it was not declared out of earnings made since the death of Mr. Payne.
It appears from the stipulated facts that all the stockholders of the First National Bank conveyed their interest in the *381dividend in question to Fred Vogel, Jr., William Bigelow, and Fred T. Goll, as trustees, for. tbe purchase of all tbe stock of the First Savings & Trust Company. Such conveyance by tbe trustee was consented to by both Mrs. Payne and Mrs. Gamer on. Tbe trust agreement provided for tbe bolding and administering of all tbe stock so purchased for. tbe benefit of all persons who were from time to time tbe stockholders of record of tbe First National Bank; and tbe evidence of ownership of tbe stock of tbe First Savings & Trust Company purchased with tbe dividend was indorsed upon tbe stock certificates of tbe First National Bank. As between remainder-man and life tenant it is immaterial what tbe latter does with tbe dividend declared from income. Soehnlein v. Soehnlein, 146 Wis. 330, 131 N. W. 739. He may, as here, enter into an agreement with tbe other stockholders to purchase a trust company, or be may not, Tbe bank declared tbe dividend and paid it over to tbe persons designated by tbe stockholders to receive it. ^ Tbe bank parted with its control over tbe money and it was not concerned as to what use tbe stockholders made of it. Neither does it concern tbe remainder-man what use tbe life tenant makes nf earnings payable to him. Tbe money in question was segregated from tbe corpus of tbe property of tbe bank and, in effect, paid to tbe stockholders, because paid to tbe persons lawfully designated by them to receive it.
Was tbe dividend derived from earnings of tbe bank accruing since tbe commencement of: the trust estate? If it was, then it belongs to tbe life tenant; if not, to tbe remain-derman ; and if partly earned since and partly before tbe trust estate vested, then in part to each. Soehnlein v. Soehnlein, supra. Tbe presumption is thqt a dividend declared on corporate stock is declared out of income, and an efficient showing to tbe contrary must be made to successfully rebut such presumption. Soehnlein v. Soehnlein, supra. Tbe dividend in question purports to have been declared out of undi*382vided profits, and the burden therefore rests upon the remain-derman to show that it was not. From the stipulated facts we reach the conclusion not only that the presumption has not been overcome, but that the proof is quite persuasive that the whole dividend was in fact paid out of earnings accruing since the commencement of the trust estate. The tabulation presented by counsel for Mrs. Payne, and based upon the stipulated facts, in our judgment shows that the whole dividend was derived from profits earned since the commence^ ment of the trust estate. The tabulation is as follows:
*383
It will be observed that in this accounting recoveries made on assets previously charged to profit and loss account are deducted from earnings. Such deduction is properly made. Assets so charged off belonged to corpus, and whatever recoveries were made on them also belonged to corpus.
The distribution of the premium made on the sale of the new stock is an equitable and just one. Fifty-three and five-tenths per cent, of that went to make the book value of the new stock equal the old. The difference between that and 170 per cent., at which the new stock sold, represented a net profit to be distributed ratably between old and new stock. Holbrook v. Holbrook, 74 N. H. 201, 66 Atl. 124, 12 L. R. A. n. s. 768; Eisner's Estate, 175 Pa. St. 143, 34 Atl. 577.
Some claim is advanced that the profits made on the Colorado coal lands should be regarded as enhancement of the capital or corpus of the bank within the rule applied to the St. Paul Avenue Improvement Company. Such claim has no foundation in fact. The bank bought the lands like any other asset, sold them, and made a profit. Had it bought instead negotiable paper or bonds with the money invested in the lands and made the same profit, the legal situation would have been just the same. In either case the bank would have *384made profits on assets purchased by it, and such profits belong to life tenant.
The trial court awarded Mrs. Payne the dividend of the First ETational Bank on 312^ shares of stock. This included sixty-two and one-half shares purchased by the trustee March 1, 1911. The dividend was declared in May, 1911. Her counsel now concedes that the amount of earnings on these sixty-two and one-half shares from the time of their purchase to the time the dividend was declared is too trivial to take into account, and that the judgment of the trial court should be modified by allowing her the dividend on only 250 shares of stock. The judgment is directed to be so modified.
It is apparent from the whole proceeding that a real and a bona fide dispute arose .between Mrs. Payne, the life tenant, and Mrs. Gamer on, the remainderman, as to how the dividends in question should be divided. It is also apparent that each of the parties, as well as the trustee, is interested in arriving at a just and fair settlement of such dispute. It is conceded that the value of the services of the trustee in this matter in behalf of the estate is $500. Under such circumstances the judgment of the trial court directing that the compensation of the trustee be paid equally out of corpus and income must be sustained. Mrs. Payne and Mrs. Oameron are each equally responsible for the existence, and equally interested in the adjustment, of the controversy. They should therefore share equally in the reasonable cost thereof.
By the Gowrt. — Judgment modified as indicated in the opinion, and, as so modified, affirmed, without costs to either party. The clerk’s fees in this court to be paid by the defendant Mrs. Payne.
A motion for a rehearing was denied October 8, 1912.