# In Re the Accounting of Osborne

> New York Court of Appeals · December 3, 1913 · 209 N.Y. 450

URL: https://www.frixlaw.com/law-library/cases/3595664

## Case

- **Full name:** In the Matter of the Accounting of James W. Osborne, as Executor and Trustee Under the Will of Eugene La Grove, Deceased, Appellant. Ivy L. La Grove, Respondent
- **Court:** New York Court of Appeals
- **Decided:** December 3, 1913
- **Citations:** 209 N.Y. 450; 103 N.E. 723; 1913 N.Y. LEXIS 846
- **Precedential status:** Published
- **Opinion:** Addendum by Chase
- **Judges:** Gray, Chase
- **Cited by:** 163 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/3595664

## Opinion text

Chase, J.
The proposition decided by us in this case is, that in all cases of extraordinary dividends, either of money or stock, sufficient of the dividend must be
*485
retained in the corpus of the trust to maintain that corpus unimpaired and the remainder thereof must he awarded to the life beneficiary. The method of accomplishing this result is not difficult. The intrinsic value of the trust investment is to he ascertained by dividing the capital and the surplus of the corporation existing at the time of the creation of the trust by the number of shares of the corporation then outstanding, which gives the value of each share, and that amount must be multiplied by the number of shares held in the trust. The value of the investment represented by the original shares after the dividend has been made is ascertained by exactly the same method. . The difference between the two shows the impairment of the corpus of the trust. If the dividend is of money the amount of that difference is to be retained by the trustee as capital, and the remainder paid to the life beneficiary. If the dividend is in stock the amount of impairment in money must be divided by the intrinsic value of a share of the new stock, and the quotient gives the number of shares to he retained to make the impairment good — the remaining shares going to the life beneficiary. Market value, good will and like considerations cannot he considered in apportioning a dividend.
The direction that the life beneficiary should be awarded parts of the dividend was erroneous, and the number of shares awarded to her must he ascertained in the method hereinbefore described, which will give to the life beneficiary 999.1 shares, and to the corpus of the trust 1,820.9 shares.
The motion of the appellant to amend the remittitur so as to recite the appearance on this appeal of the remaindermen and their consent to he bound by the judgment herein should be granted. So far as the stock dividend is retained in the corpus of the estate, the trustee is not entitled to commissions thereon. The very purpose of our decision is to make the corpus of the trust fund have
*486
exactly the same value after the division of the dividend as when the trust was originally created and on which the trustee has received his commissions. So far as the trustee is entitled to commissions on the amount awarded to the life beneficiary, which award of course is to be considered as income, it can be adjusted with such beneficiary or application therefor can be made to the surrogate.
The remittitur should be amended as herein provided.
Ordered accordingly.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/3595664. Public record. Not legal advice.