In re the Intermediate Accounting of City Bank Farmers Trust Co.

John D. Bennett, S. In this intermediate accounting, the trustee seeks instructions as to the disposition of certain stock dividends. Although the invasion of principal of the trust created under paragraph Eighth of the will to pay the accountants was unauthorized in years in which the stock dividends applicable to income were sufficient to satisfy such annuities, the proper course at present is the reimbursement of principal in the years where the amount of stock dividends allocable to income would not have required any invasion of the principal (Equitable [1044] Trust Co. v. Miller, 185 N. Y. S. 661, affd. 197 App. Div. 391, affd. 233 N. Y. 650; Mutter of Peters, 189 Misc. 222, 225; see, also, 4 Bogert, Trusts and Trustees, § 814). It appears to the court that the more equitable valuation of the stock dividends, for the purposes of reimbursement to principal, is their value at the time of receipt by the trustee and the court so holds. A distribution of stock dividends representing excess income to the income beneficiary in any of the years should be made in cash. The allocation of the stock dividends between principal and income, as set forth in the account, is approved by the court (Matter of Maher, 5 Misc 2d 83; Matter of Fosdick, 4 Misc 2d 1003, affd. 3 AD 2d 1000, affd. 4 N Y 2d 646). Settle decree on five days ’ notice.