ON REHEARING
*613John H. Hall, Newport, attorney for appellant. Black, Kendall & Pain, George Black, Jr., and Stewart Termaine, Portland, for the petition. Before Tooze, Acting Chief Justice, and Rossman, Lusk, Brand and Perry, Justices.On Respondents’ Petition eor Rehearing
TOOZE, A.C.J.Defendants have filed a petition for a rehearing in which they ask for a modification of our holding in the original opinion.
*614We modified the decree of the trial court by ordering and directing a reconveyance of the real property by the defendants James Douglas Nicol and Helen Gorham Nicol, his wife, to the trustees of the estate of James Nicol, deceased, and a cancellation of the note and mortgage upon the premises executed and delivered by said defendants to the estate; we also directed that judgment be entered against defendants in favor of the trust estate for unpaid rental in the sum of $50 per month from August 1,1952, to March 11, 1953, and in the sum of $125 per month from March 11, 1953, to the date the transaction is closed, and that there be offset against the amount of rental due and unpaid the sum of $3,500 paid by defendants upon the purchase price of said premises. This sum of $3,500 represented the cash down payment upon the original purchase price, the balance of the purchase price being included in the note and mortgage mentioned.
In their petition for rehearing defendants suggest that after the purchase was made by them they made substantial payments upon the principal and interest due upon the promissory note, and also paid real property taxes upon the residence property, together with certain premiums on a fire insurance policy covering the dwelling house, and urge upon us the propriety of allowing them credit for such sums upon their reconveyance of the property to the estate. In the light of the decision we reached, we are of the opinion that defendants are entitled to credit for the sums of money so paid by them, along with the $3,500 cash payment made originally. If the total of such payments exceeds the amount of rental unpaid as fixed in our original opinion, then upon such reconveyance defendants are entitled to be reimbursed for such excess out of the funds of the estate.
*615We do not agree with defendants that the beneficiaries of the trust estate, the plaintiff included, do not have any interest in the income of the trust estate during the lifetime of the widow, defendant Bella S. Nicol. It is true, as contended by the defendants, that the will under which the trust estate was created provides that all interest and income of the trust fund (this would include rentals) received by the trustees shall be paid to the widow, Bella S. Nicol, during her lifetime; nevertheless, the direction is not absolute. On the contrary, before such income is paid to the widow, the will directs that there shall first be deducted therefrom all taxes, rates and charges on or in respect thereto and all expenses of whatever nature attending the execution of this trust. In other words, the widow is to receive the net income, not the gross. The beneficiaries of the trust certainly have a direct interest in the payment of all expenses attending the execution of the trust, and the income from the trust fund is first charged with liability therefor. The plaintiff had an interest in the rental of the premises by the trustees for a reasonable amount.
In their brief supporting their petition for a rehearing, defendants pose this question:
“If this transaction is to be reversed, defendants-respondents ask for a clarification of your Opinion, and instructions to them, as to whether they are privileged to permit Helen and Douglas Nicol to occupy these residence premises hereafter and in the future, as tenants thereof, without receiving the express prior consent of the plaintiff Mary, and, further, whether, if they are so privileged, Mary has the right to approve or disapprove the amount of rental charged.”
It is manifest that the trustees are empowered to rent the property for the reasonable rental value *616thereof without the consent of the beneficiaries. However, when a trustee engages in self-dealing with the trust estate, he is met with very stringent rules governing the conduct of trustees. The general rule is that a trustee should not engage in self-dealing; i.e., he should not deal as trustee with himself as an individual. It may he that self-dealing with the trust estate under certain circumstances would be justified, hut ordinarily it should never he done without the express and understanding consent of the beneficiary or the approval of the court. 54 Am Jur 250, § 315.
Our original opinion will he modified hy remanding this cause to the trial court with directions to ascertain and determine the several sums paid hy defendants as follows: (1) principal and interest upon the purchase price note and mortgage; (2) real property taxes upon the premises accruing since the purchase thereof; and (3) fire insurance premiums upon the premises accruing since the purchase thereof. When these several sums are determined, the court shall allow defendants credit therefor, together with the sum of $3,500 paid hy them as a cash down payment upon the purchase price of the property. Upon a reconveyance of the property to the trust estate, the note and mortgage shall not only he cancelled, hut defendants shall he reimbursed hy the trust estate for any excess amount of money paid hy them at the time of and subsequent to the original purchase of the property as hereinabove mentioned, over and above the sum to he charged against them as unpaid rental as fixed in our original opinion.
Other than as modified herein, we adhere to our original opinion.
The petition for rehearing is denied.