Surrogate's Court, Chemung County, January, 1918. [Vol. 102. this manner, amounting to $623.52, or $1,870.56 for the three, which are allowed, to be paid as hereinafter provided for. This being, under section 2723 of the Code of Civil Procedure, a judicial settlement, commissions may also be allowed for receiving the corpus of the trust fund, and shall be paid as hereinafter provided for. The matter of the credit taken by the trustees of $1,185 for payments made to Grace Brown for clerical services, as follows: in the year 1909, $150; in the year 1910, $225; in the year 1911, $160; in the year 1913, $650, was disallowed on the former accounting. On that accounting also, the traveling expenses incurred by Boyd McDowell in looking up defaulted securities, amounting to $457.25, were allowed and directed to be paid out of the corpus of the funds. These matters have been heretofore decided by this court, and that part of the decision has been affirmed by the Appellate Division (178 App. Div. 248) in the following language: "All the persons beneficially interested are before the court. The accounts filed by the executors are for their proceedings as executors and as trustees, and those accounts have been examined and passed upon." These matters are, therefore, not properly before the court. The income account of the trustees should be surcharged with the amount of the Grace Brown claim and the Boyd McDowell expense claim; and the expense claim should be charged against the corpus of the estate. The trustees should be charged with the amount paid by them for the securities that have defaulted, together with interest on the several sums paid for the different bonds, from the date of the last payment of interest on these bonds, less any amount that has been received by them on account thereof. It having been held herein that the amount of the principal and income of the estate having been depleted Misc.] Surrogate's Court, New York County, January, 1918. by the making of unlawful investments by the trustees, it would not be fair or equitable to further reduce this principal and income by allowing the trustees commissions to be deducted at this time. The decree to be entered hereon should direct that the trustees reimburse the estate for the amount of the unlawful investments, within one year from the entry thereof, at which time the trustees' commissions may be computed and allowed as decided herein. A decree should be prepared and entered in accordance with this decision. Decreed accordingly. Matter of the Estate of JAMES H. HEROY, Deceased. (Surrogate's Court, New York County, January, 1918.) Trustees - testamentary-powers of trusts - accounting - wills. Where the principal asset of a testamentary trust was an unrentable building located in a business section and totally unadapted to conditions of business of to-day, and the trustee has power under the will to make permanent improvements where it would be reasonably anticipated that such an investment would be beneficial to both the life beneficiaries and to the remaindermen, and irrespective of the powers given to the trustees under the will there are special equities as shown by the stipulated facts upon the accounting of the surviving trustee, his account, in which the amount of expenditures for repairs to the building was charged against the corpus of the trust fund, will be settled as filed, all of the adult remaindermen consenting and asking for a decree to that effect. PROCEEDING Upon the account of a surviving trustee. Niles & Johnson (Henry B. Johnson of counsel), for William W. Heroy, surviving trustee. Ralph Q. Kelly, for Annie P. Heroy and others, remaindermen. Surrogate's Court, New York County, January, 1918. [Vol. 102. J. Robert Rubin, special guardian (in person), for William M. Heroy, 2d, James H. Heroy, 2d, Christina T. Heroy, Robert Heroy Woodward, Barbara Woodward, Edward Y. Woodward, Elizabeth Harris and Richard P. Dyckman, infants. COHALAN, S. This matter comes before the surrogate on the objections filed by the special guardian to the items set forth in Schedule G of the account of the surviving trustee concerning the expenditure of the sum of $15,364 for repairs on a building forming part of the trust estate. These expenditures have been charged off in the account against the principal of the trust fund. On the hearing of the objections counsel submitted the matter on an agreed statement of facts substantially as follows: James H. Heroy, the testator, died on December 26, 1896, leaving a last will and testament under which the surviving trustee is now accounting. He left him surviving his widow, Amelia W. Heroy, four daughters, Martha Heroy, Mary White Heroy, Annie Pluymert Heroy, Amelia James Heroy, who have not married; a daughter, Louise Chance Dyckman, who is married, and a son, W. W. Heroy, the surviving trustee. The widow and children of the testator still survive. The principal asset of the trust fund held by the trustee under the trust provisions of the will of testator consists of the building Nos. 108110 Duane street, New York city. It is a five-story loft building, and was rented to two tenants at the date of testator's death until May 1, 1904, at the annual rental of $8,750. In 1904 a lease for the term of eleven years was made to the Merchants Dining Room Company at the rate of $8,500 per annum for the first year and $9,500 for the balance of the lease. At the expiration thereof the tenant declined to renew the lease. The property remained vacant for the ensuing year and produced no income, except the sum of $182.87 received Misc.] Surrogate's Court, New York County, January, 1918. for storage, and the further sum of $143.60, the annual payment under a party wall agreement. The taxes during this period were approximately $2,000. Since the death of the testator in 1896 the character of business transacted in this locality has changed. The trustee made diligent efforts to rent the premises, but received no proposals to rent the same or any part thereof for the purposes for which they were formerly used. In fact no proposal to rent the premises was received, except that an offer was finally made by a firm in the paper business to rent the store and basement and the first and second lofts. The building had no elevator, and was not suitable in other respects for a business of this character. The floors, which were originally constructed to carry 120 pounds to the square foot, were of insufficient security, and in order to obtain the only tenants available the trustee was put to the necessity of installing an elevator which would run to the sub-basement and to strengthen the floors so that they would bear 200 pounds to the square foot. Accordingly the trustee made the above mentioned and other necessary changes, including the cementing of the sub-basement floor, the installation of electric wiring on the first floor, basement and sub-basement, steam heating connections and toilets on the second and third floors. All these improvements cost the sum of $5,460. Thereupon the trustee leased the store, basement and sub-basement to the Champion Coated Paper Company for over five years from April 1, 1916, at $5,750 per annum for the first three years and $6,000 per annum for the last two years. The first and second lofts were rented to Lasher & Lathrop, another paper concern, for thirteen months from April, 1916, at $2,750 per year. The third and fourth lofts remained vacant another thirteen months, until May 1, 1917. As before, the trustee endeavored in every way to obtain a tenant for the vacant floors, but could not obtain any offers to Surrogate's Court, New York County, January, 1918. [Vol. 102. rent the vacant lofts for any purpose for which they were suitable. Eventually the Champion Coated Paper Company finally leased the third and fourth lofts on May 1, 1917, until April 30, 1921, the balance of the term covered by their lease of the store, basement and sub-basement, at an annual rental of $2,750 for the first two years and $2,500 for the last two years. This lease was obtained by making changes which rendered the premises suitable to the use of the tenant. Additional changes, made necessary by the statutory regulations of the fire department, state labor bureau and building department enacted in this state since the death of the testator, were also made by the trustee. As to these additional changes the special guardian offers no objection. The expense of all these changes has been charged by the trustee to the principal account held in trust under testator's will. The premises since the changes were made now rent at a rental approximately $1,750 per annum in excess of what they formerly rented for before the changes were made. By his will testator left one-half of his property in trust for his widow for life, and on her death onesixth thereof in trust for each of his five daughters for their respective lives, with remainders to their heirs per stirpes. The remaining one-sixth he gave to his son outright. He also left one-twelfth of his estate in trust for each of his five daughters, with remainders upon the death of each to her heirs per stirpes. The remaining one-twelfth he devised to his son outright. The special guardian herein represents the interest of seven great grandchildren of the testator and one grandson who is over twenty years of age. The children, grandchildren and greatgrandchildren of the testator are all living, so that the only infant having a vested remainder in any of the trusts is the grandson of the testator, Richard P. Dyckman. All of the remaindermen who are of age consent through their |