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[3, 4] The affidavit presumptively established that the defendant testified to that which he did not of his personal knowledge know to be true. His statement of that which he did not know to be true was therefore, by the provisions of this section, made equivalent to a statement of that which he knew to be false. But that is not enough. By the wording of the definition of perjury (section 1620, Penal Law) the testimony must be willfully given; i. e., with a criminal intent. People ex rel. Hegeman v. Corrigan, 195 N. Y. 1, 87 N. E. 792. If the defendant believed what his mother and Clifford Barker told him, his testimony, although false, was not willfully so, and therefore not perjury. People v. Dishler, 38 Hun, 175. Our experience in the trial of cases teaches us that witnesses often honestly testify to facts that on cross-examination turn out to be not within their personal knowledge, but based on statements of others, or on conclusions that they drew from other facts. The effect of suggestion on an uneducated boy of 11 years is well known. He knows nothing of the rule of evidence excluding hearsay. If induced by suggestion to believe that a fact exists, he does not hesitate so to testify, and a statement that he did not recollect the fact, or had no independent recollection of it, without evidence that he did not believe it to exist, and therefore willfully testified, falls short of the legal requirements.

[66] I think the probabilities are that the facts to which he testified did exist, and that when he testified he believed them to exist. It is true that a witness may be guilty of perjury in testifying that he does or does not remember a given fact (People v. Doody, 172 N. Y. 165, 64 N. E. 807); but that such testimony is willfully given is an element of the crime that must be established beyond a reasonable doubt. In this respect I think the verdict was against the weight of evidence.

It is unfortunate that just at the close of the trial purely hearsay evidence, competent, if at all, only for the purpose of impeaching a witness, was given and repeated, to the effect that some member of the Barker family had offered to use large sums of money for the purpose of securing evidence of the marriage of Estelle Whitney and Murtha. In view of the conclusive proof of the marriage by the testimony of the clergyman and a witness to it, and of the public records, the suggestion that any member of the Barker family was resorting to such methods to secure evidence of negligible value is incredible. However, the jury, which often does not appreciate the distinction between hearsay evidence, offered for the purpose of impeachment, and direct evidence on the issues, would in their minds connect this evidence with the testimony given by the defendant, on which he was convicted, and thus was created an unfavorable medium through which they viewed the evidence given on the trial of this action.

It is a question whether, in view of the evidence adduced on the trial, the affidavit, considering the way in which it was obtained, although it presumptively established the falsity of the testimony, was sufficient as a basis of conviction; but I prefer to place the decision that the verdict was against the weight of evidence on the ground of the insufficiency of the evidence to show that the testimony was willfully given.

(178 N.Y.S.) The judgment of conviction should be reversed upon the facts as well as the law, the order of reversal settled accordingly, and a new trial ordered.

JENKS, P. J., and MILLS and RICH, JJ., concur.
JAYCOX, J., dissents.

(189 App. Div. 75)

In re UNITED STATES TRUST CO. OF NEW YORK.

In re COLGATE'S WILL.

(Supreme Court, Appellate Division, Second Department. October 3, 1919.) 1. TRUSTS 217 (4)—TRUSTEE, WHEN AUTHORIZED TO INVEST CORPUS OF ESTATE

IN RAILROAD STOCK,

Where a will creating a trust, after authorizing the trustee to sell and invest the proceeds of securities as it shall in the exercise of a sound discretion deem for the best interest of the estate, expressly declared that the trustee should not be limited to the usual investments of trust estates, the trustee was authorized to invest in good railroad stocks

a portion of the corpus of the trust which it received in money. 2. TRUSTS 218(1)—TRUSTEE, WHEN NOT LIABLE FOR LOSS BY DEPRECIATION

OF INVESTMENTS.

A testamentary trustee, which invested funds in one of the best railroad stocks, held not liable for depreciation, though it retained the stock for a considerable time in face of a declining market, and then disposed of

it at much less than the price paid. 3. TBUSTS w218(1)-TRUSTEE, LIABLE FOR DEPRECIATION OF INVESTMENTS, TO

BE CREDITED WITH SUBSCRIPTION RIGHTS.

Where a trustee invested trust money in railroad stock, held that, where the stock depreciated and the investment resulted in loss, the trustee, in event of liability, was entitled to offset against such loss sums which it received for the sale of subscription rights appurtenant to the

stock, 4. TRUSTS 237-INSTRUMENT NOT A RELEASE OF TRUSTEE FOR DEPRECIATION

OF TRUST FUND.

That adult remainder beneficiaries, after death of that beneficiary who was to receive the income from a trust for life, executed to and with the trustee an instrument assigning to it their interest in the trust fund upon a new and further trust specified, etc., held not a release of the trustee's liability for making an improper investment of trust funds; it appearing that the trustee's report at the time of the assignment concealed the loss resulting from the investment.

Appeal from Surrogate's Court, Westchester County.

In the matter of the judicial settlement of the account of proceedings of the United States Trust Company of New York, as trustee under the will of James B. Colgate, deceased. Cross-appeals from a decree of the Surrogate's Court by the remainder beneficiaries under the trust and the trustee. Decree modified, and, as modified, affirmed.

Argued before JENKS, P. J., and MILLS, RICH, KELLY, and JAYCOX, JJ.

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Icdexes

William A. W. Stewart, of New York City (H. K. Davenport, of New York City, on the brief), for United States Trust Company of New York, appellant respondent.

Theodore H. Lord, of New York City (Charles W. Lucas, of New York City, and Irene Bennett Adams, of Mt. Kisco, on the brief), for Jessie C. Colgate and others, respondents appellants.

Theodore F. Humphrey, of New York City, general guardian of Jessie C. Colgate, an infant, respondent.

MILLS, J. These are cross-appeals, respectively, by the trustee of a trust created by a codicil to the will of the late James B. Colgate, and by the remaindermen beneficiaries under that trust, from a decree of the Surrogate's Court of Westchester County, filed December 31, 1918; the trustee appealing from that part of the decree which surcharged it with the sum of $7,253.50 as a balance of loss upon its investment of funds in 200 shares of the common stock of the Chicago, Milwaukee & St. Paul Railroad Company, and the beneficiaries appealing from so much of that decree as allowed to the trustee a credit upon that loss of a certain sum received from the sale of subscription rights upon the stock, which credit reduced the loss to the amount above stated.

There is no dispute about the facts. They are as follows: The codicil probated February 24, 1904, left to the United States Trust Company a fund of $200,000 in trust, to pay the income thereof to the testator's son, William H. Colgate, during his life, and upon his death to pay the fund to that son's children then living; each portion payable upon the recipient attaining the age of 25 years. On April 15, 1904, the trustee for that fund received from the executors certain securities of the appraised value of $45,000, and also $155,000 in cash. It soon invested the cash in certain securities, which included the 200 shares of common stock above stated; the same being purchased at the rate of $144.25 a share, making an aggregate price of $28,850. The trustee continued to hold that stock until, on September 24, 1917, sold the same at $58.25 a share, or for the aggregate sum of $11,621, making a gross loss or depreciation of $17,229 upon the investment. Meanwhile it had sold certain stock subscription rights which had been issued upon those shares for the aggregate sum of $8,975.50, which, being deducted from the gross loss or depreciation, left a net loss or depreciation of $7,253.50. The decree surcharged the trustee upon its final accounting, then pending, with that net loss. The portion of the codicil referring to that trust contained the following provisions as to the powers and duties of the trustee in respect to its investment:

"And it is further my will and I authorize and empower my said trustee the United States Trust Company of New York in lieu of money to receive from my executors any stocks, bonds, mortgages or other securities which may be held by me at the time of my decease in payment of said legacy at their market value to be ascertained by appraisement and hold the same upon the trust hereby created for the benefit of my said son William or to sell the same and invest the proceeds thereof in like securities or in such railroad bonds stocks and other securities as it shall in the exercise of a sound discretion (178 N.Y.S.) deem to be for the best interest of said trust estate it being my will that the said trustee shall not be limited to the usual investments of trust estates.

"It is my will that my said trustee shall not be held liable or responsible for any loss which may occur to said trust estate by reason of the retention of any of the securities which they may so receive from my executors or by reason of any investments made in accordance with these directions."

By stipulation of the parties the facts as to the said investment and the standing of the stock and its market variations during the period of its retention by the trustee as above stated were proven by the affidavit of Mr. Kingsley, vice president of the trustee. The material facts so proven are that, as is well known, that railroad company was at the time of the said purchase in 1904 regarded as one of the best in the country, paying good dividends, then at the rate of 7 per cent., but that during the war period its market value pretty steadily declined, although fluctuating considerably, and in 1917 ranged from 92 high to 35 low. It appears also, as is well known, that during the same period there was a large depreciation in the market values of stocks of other good railroad companies.

The learned surrogate filed a brief opinion, in which he held that the investment in railroad stocks was not allowed either by statute or by the codicil. It also appears that after three of the four beneficiaries arrived at full age, and after the death of their father, the life beneficiary, two of them, namely Gertrude M. Colgate and James B. Colgate, each executed to and with the said trustee an instrument assigning to it his or her interest in said trust fund upon a new and further trust therein specified, and that the third adult beneficiary, William Hoyt Colgate, after reaching full age, executed to the trustee a release upon receiving from it the securities which it had set aside as his share. The trustee before the Surrogate's Court claimed that those assignments and that release operated as to the three adult beneficiaries to waive and bar any claim by them to surcharge the account of the trustee, as has been done; but the learned surrogate in his opinion overruled that contention.

The main question presented by these appeals, therefore, is the question whether or not the said provision of the codicil authorized the particular investment in question. In his main decision the surrogate found that the purchase and retention of said stock was unauthorized, and was in violation of the duty of the trustee, although in passing upon the requests submitted he refused to find either way upon the question whether or not the codicil authorized such investment.

[1] Counsel for the beneficiaries contends that the above-quoted clause in the codicil must be construed as authorizing investment in other than securities usual for trust estate investments only as to the proceeds derived from sales of the securities held by the testator at his death, and therefore as not authorizing such investment of the cash ($155,000), which was turned over by the executor to the trustee as the major part of the trust fund of $200,000, and therefore as not authorizing this particular investment in the stock of the Chicago, Milwaukee & St. Paul Railroad Company, while counsel for the trustee contends that that clause in the codicil did authorize such investment generally of the trust fund, both of the cash and of the proceeds from the sale of securities actually so turned over.

It is my judgment that the latter contention is correct. It seems to me that any doubt upon the subject is solved in that way by the general term used in the codicil, viz.:

"It being my will that the said trustee shall not be limited to the usual investments of trust estates."

It would be a very narrow construction to limit those general words to the special instances therein just before detailed, namely, the reinvestment of the proceeds of sales of the securities actually turned over, which had belonged to the testator in his lifetime. No substantial reason for such distinction can be surmised, and certainly none appears in any way in the evidence. It is plain from the testimony of Mr. Kingsley that in 1904, when this investment was made by the trustee, the common stock of the Chicago, Milwaukee & St. Paul Railroad Company was in good repute as compared with other railroad stocks.

[2] It is also contended by counsel for the beneficiaries that it was negligence for the trustee to retain the stock so long—13 yearsand the latter part of the period in the face of a declining market. It appears that the stock maintained its market value fairly until about the commencement of the war, that then it declined and continued to decline past the time when it was sold by the trustee on September 24, 1917, and that by the end of 1917 it had sold down to 35.

There is in the decision no attempt to find when the trustee in the exercise of due care should have sold the stock upon the declining market, if its original investment therein was authorized; therefore nothing appears in the decision from which we could fix the loss upon that basis. The finding of negligence therein is general, both in the purchase and the retention; nor do I perceive in the evidence sufficient basis for that determination, if we should hold that due care did require an earlier sale of the stock. It is quite likely that the exemption in the codicil from liability to loss upon investment made by the trustee in the exercise of the authority conferred, while granted in absolute terms, might not cover every conceivable such loss; still I think it is ample to protect the trustee from liability for retaining the stock as long as it did. The general conditions in this country were most extraordinary. The railroads were taken over by the federal government, and it was a matter of common thought for a time that their securities would appreciate in value under that system. I think it would be unreasonable to hold a trustee liable for retaining such securities under such conditions in the hope of a better market, when it was authorized by the terms of the trust to make such an investment originally. In short, it is my conclusion that no negligence on the part of the trustee was established, either in the original purchase or in the retention of the stock.

[3] As to the appeal by the beneficiaries, I think that if the trustee was properly held liable for the purchase and retention of the stock, and therefore chargeable with depreciation in its value and consequent loss, it was by the Surrogate's Court properly credited with what it

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