-. highest importance that competent parties (219 N. Y. 554, 635) PRATT et al. v. STATE. (Court of Appeals of New York. Oct. 17, 1916. On Motion for Reargument, Dec. 5, 1916.) On Motion for Reargument. APPEAL AND ERROR 221-OBJECTION BE- An objection that recovery was not limited to the basis warranted by the evidence cannot be raised for the first time on appeal. [Ed. Note.-For other cases, see Appeal and Error, Cent. Dig. 88 1353-1356, 1359, 13611363, 1365-1367; Dec. Dig. 221.] Appeal from Supreme Court, Appellate Division, Third Department. Action by George L. Pratt and others against the State of New York. From a judgment of the Appellate Division (172 App. Div. 914, 160 N. Y. Supp. 1143), affirming an award of the Board of Claims in a proceeding to recover the value of certain lands and water power rights and privileges which, claimants contend, were owned by them and appropriated by the state, pursuant to the provisions of the Barge Canal Law (Laws 1903, c. 147), for barge canal purposes. The State appeals. Affirmed. Egburt E. Woodbury, Atty. Gen. (Edward J. Mone, Dep. Atty. Gen., of counsel), for appellant. Edward R. O'Malley, of Buffalo, and D. Raymond Cobb, of Syracuse, for respondents. PER CURIAM. The grounds upon which ages against the carrier (Georgia, F. & A. the reargument is asked are as follows: Ry. Co. v. Blish M. Co., 241 U. S. 190, 197, That the court overlooked the fact that 36 Sup. Ct. 541, 60 L. Ed. 948). The conten-while claimants' title to or interest in the tion of appellant that the agreed value does Battle Island state dam and in or to the use not conclude the shipper as against the acts of the water of the Oswego river rose out of of employés outside the scope of their em- and was fixed and established by the canal ployment cannot be sustained without ig- appraisers' award of September 25, 1869 (Exnoring the terms of the contract, disregard-hibit 40-A), when the crest elevation of the ing the intent of the parties and of the acts of Congress regulating interstate transportation and holding the carrier to a different responsibility than that which it assumed. The order should be affirmed, with costs, and the question should be answered in the affirmative. Battle Island dam was 307.22 barge canal datum, the judgment appealed from allowed claimants the value of the use of one-half of the surplus water of the river "as developed at the time of the filing and service of said appropriation maps," to wit, as of May, 1911, when the crest of the dam was at elevation 308.5 barge canal, datum. In other and words, that subsequent to the making of the CHASE, COLLIN, CUDDEBACK, HOGAN, canal appraisers' award of 1869, to wit, in and CARDOZO, JJ., concur. WILLARD BARTLETT, Order affirmed. C. ༨༥ 1904, the state, for the purpose of improving the navigation of the Oswego river, raised the crest of this state canal dam 15 inches (from 307.22 to 308.5 barge canal datum); (219 N. Y. 482) and the judgment appealed from awards VILLARD et al. v. VILLARD et al. claimant the value of the use of one-half of (Court of Appeals of New York. Dec. 28, 1916.) the surplus water of the river with the crest of the dam at the latter, instead of at the former, elevation. It is contended that the Board of Claims adopted an erroneous basis of valuation. | The board finds (XXXI, p. 985) that the claimants owned the Van Buren mill and power as developed by the Van Buren dam. It also concludes (VI, p. 999) that claimants are entitled to the value of their property, including the value of the use of the flow of the water as developed in 1911, and makes its award accordingly. It appears (XLVIII, p. 993) that the Van Buren dam had in 1867 an elevation of 307.22 feet, and that in 1904 the crest of the dam was raised by the state 1.28 feet to an elevation of 308.5, and that the water power thus developed is what has been appropriated by the state. There is no finding of fact that the claimants are entitled to the use of the flow of the water as developed in 1911. In his opinion Judge Haight says (fol. 4691): "The new (1867) dam so constructed by the state was about sixteen inches higher than the old (1828) dam, thus raising the water level." His award might seem to be based on this theory, but the findings are that the 1828 dam and the 1867 dam were of the same elevation (LXVII, p. 993). The facts as found show a property right in a water power developed by the 1867 dam, but the award is based on a water power developed by the 1904 dam. The evidence makes reference to flash boards which raised the 1867 dam 16 inches above its crest, but they are not referred to in the findings. There is no finding of fact that the claimants were the owners of any additional water power created by raising the crest of the dam in 1904. The award may be sustained by reference to the evidence as to the flashboards by which the 1867 dam was raised 16 inches, so that, while the crest of the dam was raised in 1904, the flow remained the same as in 1867. It seems that this was the theory upon which the case was tried. The appellant's brief (page 87) states that: "There is no evidence whatsoever from which the value of the use of this water under the head which existed from 1867 to 1904 could be determined. The only evidence offered by either claimants or the state was as to the value of the water power under the head as it existed at the time of the appropriation in 1911." It is too late for the state, having gone through the trial without raising the objection, to make the point that the limit of the recovery is the value of the use of one-half of the surplus water employed under the head available in 1867, without the flashboards. This question was considered carefully on the determination of the appeal. The motion should therefore be denied, with $10 costs. All concur. Motion denied. 1. EXECUTORS AND ADMINISTRATORS INVESTMENTS BY EXECUTOR. 102 While the primary duty of an executor is to convert the assets of an estate into cash and pay debts and gifts and bequests, circumstances may arise making it his duty to invest uninvested funds, or change investments of testator, as where they are palpably unsafe. [Ed. Note.-For other cases, see Executors and Administrators, Cent. Dig. 420; Dec. Dig. 102.] 2. EXECUTORS AND ADMINISTRATORS 103, 115-INVESTMENT OF ESTATE FUNDS-LIABILITY OF EXECUTOR. If an executor invests funds of the estate contrary to the provisions of the will or Decedent Estate Law (Consol. Laws, c. 13) § 111, as to securities in which trust funds may be invested, he is liable for any loss that may result, without the right to any profit that he may make by such investment. [Ed. Note. For other cases, see Executors and Administrators, Cent. Dig. §§ 421, 422, 467, 468; Dec. Dig. 103, 115.] 3. EXECUTORS AND ADMINISTRATORS 103— INVESTMENT OF ESTATE FUNDS-LIABILITY OF EXECUTOR. It is optional with beneficiaries of the estate to hold the personal representative liable for the amount of funds that he has invested improperly, or to accept the investment as made. [Ed. Note.-For other cases, see Executors and Administrators, Cent. Dig. §§ 421, 422; Dec. Dig. 103.] 4. EXECUTORS AND ADMINISTRATORS 114INVESTMENT OF ESTATE FUNDS-ESTOPPEL OF RESIDUARY LEGATEES. Where executors, at the request of residuary legatees, made investment of funds of the estate in securities not authorized by law or by the will, the residuary legatees were estopped to assert any personal liability against them in case of loss. 6. TRUSTS 218(1) — INVESTMENTS -TRUSTEE'S LIABILITY FOR Loss. Under a will directing the executors to set apart to a trustee, for annuity fund, sufficient cash or securities to pay such annuities, and relieving the trustee from liability for loss from they had been owned by testator at his death, retaining securities so received by it in case although not legal trust fund securities, the trustee was liable for loss resulting from its retaining, without reinvestment in authorized securities, stock received by it from the executors, which had been purchased by them for the estate after testator's death; the trustee not having a right as a matter of law to assume that stocks submitted to it by the executors were owned by testator at his death, and the facts being discoverable by inquiry. [Ed. Note. For other cases, see Trusts, Cent. Dig. §§ 310-312; Dec. Dig. 218(1).]' For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes 7. APPEAL AND ERROR_1010(1)-REVIEW- the executors of this my will out of the general QUESTIONS OF FACT-FINDINGS. The Court of Appeals is bound by findings when supported by some evidence. [Ed. Note.-For other cases, see Appeal and Error, Cent. Dig. §§ 3979-3981; Dec. Dig. 1010(1).] Appeal from Supreme Court, Appellate Division, Second Department. Action by Fanny Garrison Villard, individually, and others, against Fanny Garrison Villard, as executrix, and others, as executors, etc., of Henry Villard, deceased, and others. From a judgment of the Appellate Division (166 App. Div. 203, 151 N. Y. Supp. 1027) affirming a judgment of the Spe cial Term against the Farmers' Loan & Trust Company, as trustee, the trust company as trustee and also in its own right appeals. Affirmed. income of my estate; and I direct that if in any year the net income of the sum or fund set apart to provide such annuity shall be insufficient to pay the full amount of such annuity the trustee for the time being of such trust, shall make up and pay the deficiency out of the capital of the said trust fund; and I direct that any and all surplus income of the said fund in any year, after the full payment and satisfaction of the said annuity, shall be paid by the trustee for the time being of the said trust to the persons to whom by the twenty-first article of this my will I have given and bequeathed my residuary estate in the like shares in which I so give and bequeath to them my residuary estate and I give and bequeath such surplus income to them accordingly; and upon the death of my said daughter I direct that the trustee for fer, deliver and pay over the capital of the said the time being of the said trust, convey, transtrust estate or fund, with all gains, and increase of capital, if any, to such of my sons Oswald Villard and Harold Villard as shall survive my said daughter and the issue who shall survive previously, died in equal shares per stirpes, and not per capita." The facts, so far as material, are stated in my said daughter of such of them as shall have the opinion. Seventh. (The testator gave and bequeathed to his sister Emma, the wife of Lieutenant General Von Xylander of the city of Munich in Bavaria, an annuity or yearly sum of twenty thousand reichsmark. The gift is made in exact Charles F. Brown, of New York City, for appellant. James Byrne, of New York City, for respondents executrix and executors. William M. Wherry, Jr., of New York City, for respondents plaintiffs. Frederic E. My-ly the same language and upon exactly the same gatt, of New York City, for respondents Helen Villard Bell and others. CHASE, J. Henry Villard died November 10, 1900, leaving a will which was duly probated December 29, 1900, and his widow, Fanny Garrison Villard, his friend, Horace White, and his late private secretary, Charles A. Spofford, were duly named as executrix and executors and qualified as such. The will, so far as now material, provides as follows: "Sixth. I give and bequeath to my daughter Helen, an annuity or yearly sum of six thousand dollars, to be paid to her in equal quarterly installments from the time of my death during her natural life, the first of such installments to be paid to her at the expiration of three months next after my death, and in order to provide for such annuity I direct that the executors of this my will hereinafter named as soon as practicable after my death, set apart a sum of money or securities to an amount or of value in their judgment amply sufficient to provide from the annual income thereof the sum of six thousand dollars in each year over and above all taxes, charges, commissions and expenses lawfully chargeable against or in respect of the said fund or the income thereof, and transfer, deliver and pay over the same to the Farmers' Loan & Trust Company of New York, to which company I give and bequeath the same to be had and holden by the said company and its successors in the trust, as trustee, in trust during the natural life of my said daughter Helen, to invest and keep invested the same, with power to call in and change the investments thereof from time to time and to collect and receive the income thereof, and after paying thereout all lawful expenses and charges, to pay to my said daughter the said sum of six thousand dollars free from all de ductions, in each year during her natural life in equal quarterly installments as aforesaid; and until such sum or fund shall be set apart, transferred and delivered to the said the Farmers' Loan and Trust Company of New York as aforesaid I direct that such annuity be paid by trusts provided in his gift to his daughter Helen, as quoted, except that the final clause directs that after the death of his sister the trustee for the time being of the said trust "convey, transfer, deliver and pay over the capital of the said estate or fund with all gains and increase of by the twenty-first article of this my will, I give, capital thereof, if any, to the persons to whom, and bequeath my residuary estate and in the like shares in which I so give and bequeath to them my residuary estate and I give and be queath the same to them accordingly.") "Twenty-Third. I hereby will and declare that the executors of this my will may in their discretion retain unsold for so long as they shall think fit, any and all stocks and bonds and other securities and other personal property or assets which shall belong to me at the time of my death and not by this will specifically bequeathed, and for any loss resulting from any such retention such executors shall be in no wise liable or responsible. "Twenty-Fourth. I hereby will and declare that the trustees or trustee for the time being of any trust by this my will created may in the discretion of such trustees or trustee retain as investments of the trust estate or fund for so long as such trustees or trustee shall think fit any bonds or other securities belonging to me at the time of my death which may be received by such trustees or trustee from the executors of this my will as part of the trust estate or fund although the same may not be of such character as is permitted for investments by trustees by the general rules of law, and I do hereby will and declare that investments and reinvestments of moneys at any time belonging to or forming part of any trust estate or fund by this my will created may be made by the trustees or trustee for the time being of such trust in bonds or stocks of the United States or in bonds of any state or of any city in the United States or in bonds secured by first mortgages on real estate in the United States or in first mortgage bonds of any railroad or railway company, or in productive real estate situated within the United States and for any loss resulting from any investments so made the trustees or trustee making the same shall not be liable or responsi ble." annuity provided for, up to and including November 12, 1901. The next quarterly installment, therefore, will be due February 12, 1902. "A quarterly dividend upon the shares of the Metropolitan Street Railway Company has been which I will send you a check for the amount. declared payable January 15th, upon receipt of "Please sign and return to us the accompanying form of receipt and oblige. * The testator gave one-half of his residua- | viz. Mrs. Helen V. Bell, Bergstrasse 38, Dresry estate to his wife, and one-fourth each den, Germany, all quarterly installments of the to his two sons. He left a personal estate amounting to about $3,000,000, of which about $530,000 was in cash. A gift by the will to his wife of $250,000 was paid to her in cash, January 10, 1901, and a gift to his son Oswald of $50,000 was paid December 30, 1901, partly in cash and partly in se curities. Substantially all of his gifts to institutions and persons other than as provided by said paragraphs 6 and 7 of the will and of the residuary estate were paid by the executors by January 7, 1902. The deceased's indebtedness other than a claim of one Wetmore aggregated about $34,000. One Wetmore presented a claim against the estate of several hundred thousand dollars. The executors attempted to compromise such claim, but were unable to make a settlement for several years. The claim was finally settled in 1910 for $5,000. In March, 1901, the residuary legatees delivered to the executors a letter, the material part of which is as follows: "We hereby request you to sell as many of the bonds belonging to the estate as can be disposed of to advantage at the present market prices and to invest the proceeds arising therefrom in the following named and such other dividend paying stocks as you Baltimore & Ohio, * Metropolitan Street Railway. deem safe: The executors and executrix in compliance with such request prior to March 3, 1902, sold bonds and stocks belonging to the estate at the market price and purchased other stocks, paying therefor in the aggregate $1,028,528.42. Included in the stocks so purchased was 500 shares of the Metropolitan Street Railway Company, and 1,000 shares of the Baltimore & Ohio Railroad Company preferred stock. On or prior to January 9, 1902, one of the executors went to the Farmers' Loan & Trust Company, and there talked with its secretary and told him what securities the executors proposed to place in the trusts provided by the sixth and seventh paragraphs of the will, and asked if the securities proposed were satisfactory, and he was told by the secretary that such securities would be satisfactory for said trusts. On the 9th day of January, 1902, the executors delivered to said Farmers' Loan & Trust Company a letter, the material parts of which are as follows: With said letter the stocks as therein mentioned were delivered to said trust company, and it gave to the executors a receipt of which the following is a copy: "Received from Fanny Garrison Villard, executrix and Horace White and Charles A. Spofford, executors of the last will and testament of Henry Villard, deceased, five hundred the Milwaukee Electric Railway & Light Co. (500) shares of the preferred capital stock of certificates Nos. A 46, 47, 48, 49, 50, all registered in the name of Henry Villard, and five Metropolitan Street Railway Co. Nos. 16336, hundred (500) shares of the capital stock of the 17507, 17508, 17509 and 17510, all registered in the name of C. A. Spofford, to be held by this company as trustee under the sixth clause of the will of said Henry Villard." A similar letter was delivered to the trust company relating to the trust for the benefit of Madame Von Xylander, except that the stocks therein mentioned and therewith delivered consisted of 550 shares of the Milwaukee Electric Railway & Light Company and 500 shares of the preferred stock of the Baltimore & Ohio Railroad Company. The trust company delivered to the executors a receipt similar to the one given to them relating to the trust for the benefit of the testator's daughter Helen. The stocks of the Milwaukee Electric Railway & Light Company so delivered were owned by Henry Villard at the time of his death. The stocks of the Metropolitan Street Railway Company and of the Baltimore & Ohio Railroad Company were a part of the stocks purchased by the executors in compliance with the requests made to them by the residuary legatees. The stock certificates of the Metropolitan Railroad Company and the Baltimore & Ohio Railroad Company were all dated subsequent to the death of Henry Villard and were in the individual name of the executor Spofford. The value of the stocks so delivered for the trust for the benefit of the testator's daughter Helen, at the time of the delivery, was about $142,000, and of the stocks so delivered for the benefit of Madame Von "In compliance with the direction contained in Xylander was about $114,000. A large part article sixth of the last will and testament of of said stocks have been retained by the Henry Villard, deceased, a copy of which we trust company without change. The stocks have furnished you, we herewith deliver to you: Five hundred (500) shares of the preferred cap- of the Metropolitan Street Railroad Compaital stock of the Milwaukee Electric Railway & ny have become wholly or substantially Light Company certificates Nos. A 46, 47, 48, worthless, and the stocks of the Baltimore 49, 50, all registered in the name of H. Villard; and five hundred (500) shares of the cap- & Ohio Railroad Company were at the time ital stock of the Metropolitan Street Railway of the accounting materially reduced in marCompany certificates Nos. 16336, 17507, 17508, 17509, 17510, all registered in the name of C. A. Spofford-to be held by you as trustee for the purposes of the trust, thus created. We have paid to the beneficiary under this trust, ket value. The trust company did not have actual notice that the stocks of the Metropolitan Street Railway Company and the Baltimore & Ohio at his death." Railroad Company did not belong to Henry | Railroad Company by the exercise of ordinary Villard at the time of his death until No- care could have known that neither said stocks vember 12, 1912. The executors did not have nor either of them were owned by the testator a settlement of their account prior to the accounting in this action. In October, 1911, the plaintiffs, the residuary legatees, brought this action to compel an accounting by the executors and the Farmers' Loan & Trust Company as trustee under the sixth and seventh provisions of said will, "and that this court ascertain, determine, adjudge, and declare what amounts are due and owing and properly payable to the plaintiffs as residuary legatees under the said last will of Henry Villard, deceased; and that the provisions of the said will of Henry Villard, deceased, in respect to the amounts above mentioned, be construed as to the right intent and meaning thereof, and the rights and duties of the trustees, executrix, and executors thereof, and of the parties to this tion, be determined and declared." "XXXIII. The trust company at all times after the delivery to and acceptance by it of said shares of the capital stock of the Metropolitan exercise of reasonable care have ascertained, Street Railway Company knew, or could by the that its investment in said shares of stock was unsafe and insecure and was continuously growing more unsafe and insecure. "XXXIV. Six months from and after the ac ceptance thereof by the trust company was a reasonable time within which to sell said shares of stock of the Metropolitan Street Railway Company and said shares of the preferred stock of the Baltimore & Ohio Railroad Company and reinvest the proceeds thereof, and said shares of stock could by the exercise of ordinary care have been sold and disposed of in the open market during said period of six months at prices of $164 per share for said shares of stock of the Metropolitan Street Railway Company and $96 per share for said shares of the preac-ferred stock of the Baltimore & Ohio Railroad Company. The court at the trial found: "X. The said 500 shares of the capital stock of the Metropolitan Street Railway Company had at the time of the delivery thereof by the executors to the trust company as aforesaid a market value of $164 per share, and the said shares of the capital stock of the Metropolitan Street Railway Company could have been sold during four months next after the delivery of said shares to the trust company as aforesaid for a sum in excess of $82,000. "XI. The said stock of the Metropolitan Street Railway Company at the time of the said delivery thereof, and for more than a year prior thereto, had regularly paid dividends at the rate of 7 per cent. per annum, and at the time of said delivery said shares of the stock of the Metropolitan Street Railway Company produced an annual income of $3,500. "XXXV. The trust company as such trustee was guilty of negligence in retaining as an investment of the trust created by the sixth paragraph of said will said 500 shares of the capital stock of the Metropolitan Street Railway Company and in failing to sell the same and reinvest the proceeds thereof. "XXXVI. The loss of the value of said 500 shares of the capital stock of the Metropolitan Street Railway Company and of the principal of the trust created by the sixth paragraph of said will was caused by wrongful retention by the trust company of said shares as an investment of the trust created by the sixth paragraph of said will and by the negligence of the trust company in retaining said shares and in failing to sell the same and reinvest the proceeds thereof. "XXXVII. Said 500 shares of the preferred capital stock of the Baltimore & Ohio Railroad "XII. The said 500 shares of the preferred Company have since May 1, 1902, depreciated capital stock of the Milwaukee Electric Rail-in value to the extent of $3,500 and have caused way & Light Company and the 500 shares of a loss in the principal of the trust created by the capital stock of the Metropolitan Street the seventh paragraph of said will of $3,500. Railway Company were accepted by the trust company in full payment, satisfaction, and discharge of the bequest made to the trust company by the sixth paragraph of said will, and were at the time of such delivery of a value amply sufficient to produce the sum of $6,000 in each year over and above all taxes, charges, commissions, and expenses lawfully chargeable against or in respect of said fund or the income thereof, and were in the judgment of the executrix and executors of a value amply sufficient for such purpose.' "XVII. Said 550 shares of the preferred capital stock of the Milwaukee Electric Railway & Light Company and 500 shares of the preferred capital stock of the Baltimore & Ohio Railroad Company were of a value amply sufficient to provide from the income thereof the sum of 20,000 reichsmark in each year over and above all taxes, charges, commissions, and expenses lawfully chargeable against or in respect of the said fund or the income thereof, and were in the judgment of the executors amply sufficient for such purpose, and the said shares of stock did at said time and for long prior thereto provide an income in excess of 20,000 reichsmark over and above all the taxes, charges, commissions, and expenses lawfully chargeable against or in respect of said fund or the income there of. * "XXVI. The trust company at the time of the delivery to and acceptance by it of said shares of the capital stock of the Metropolitan Street Railway Company and said shares of the "XXXVIII. Said loss in the principal of said trust created by the seventh paragraph of said will was caused by the wrongful retention by the trust company as an investment of said trust of said 500 shares of the preferred capital stock of the Baltimore & Ohio Railroad Company by its failure to sell said shares and reinvest the proceeds thereof. "XXXIX. During the year 1902 safe investments could by the exercise of ordinary care be secured in first mortgage bonds of railway companies and in first mortgages on real estate in the United States to yield not less than 41⁄2 per cent. on the amount so invested." The court charged the appellant with the losses to said trusts arising from depreciation of the stocks in the Metropolitan Street Railway Company and in the Baltimore & Ohio Railroad Company. It was not by statute authorized to hold said stocks as a part of the trust funds. Its authority by will is stated in the twenty-fourth paragraph thereof quoted. In the voluminous briefs presented to us herein, much is said about the respective duties of executors and trustees. It is only necessary to consider the duties of each so far as such consideration is essential for the purpose of determining whether the judg |