Eastwood, Bigelow and Francis. The opinion of the court was delivered by Eastwood, S.j.a.d.
The plaintiff, The National Newark and Essex Banking Company of Newark, substituted trustee under the last will and testament of Nellie Bond Osborne, deceased (hereinafter referred to as "the trustee"), appeals from the judgment of the Chancery Division, denying its application to reinvest the corpus of the trust estate created by the testatrix. The trial judge held that the objects of the trust would not be defeated by adhering to the restrictions enjoined upon the trustee to invest in securities legal for trustees "at the time of my death."
The testatrix, a widow, died on January 28, 1922, and was survived by a daughter-in-law, Vera Grace Osborne, widow of Harold B. Osborne, testatrix' deceased son, and a
daughter, Mary Bailey Osborne (now Mary Bailey Waite). Mrs. Waite is the mother of two minor children, Pamela Osborne Waite and Charles M. Waite, Jr., (approximately 3 and 2 years of age), for whom their father, Charles M. Waite, is guardian ad litem.
Under decedent's will, a trust was created out of the residuary estate with directions to the trustee to pay one-half of the net income therefrom, but not exceeding the sum of $250 per month (increased to $400 per month under the codicil), to testatrix' daughter-in-law, Vera Grace Osborne, so long as she lived and remained the widow of the son, Harold B. Osborne, and the balance of the income or any portion thereof as might be necessary to be used for the "comfort, support and education" of Mary Bailey Osborne, testatrix' granddaughter, during her minority, and any unexpended balance of income was to be added to principal. When Mary Bailey Osborne attained the age of 21 years, she was to receive her entire share of the income of the trust for and during the term of her life. Upon the death of Mary Bailey Osborne, and if Vera Grace Osborne had theretofore remarried or died, the trust is to terminate and the principal and accumulated income is to be divided equally between the surviving children and issue of any deceased children of Mary Bailey Osborne, per stirpes. If Vera Grace Osborne has not died nor remarried, only one-half of the corpus is to be distributed to the aforementioned remaindermen and the remaining one-half is to be distributed on the remarriage or death of Vera Grace Osborne. In the event that Mary Bailey Osborne dies leaving no issue surviving, then upon her death and upon the death or remarriage of Vera Grace Osborne, the corpus and accumulated income is to be divided among several distributees designated by the will. Vera Grace Osborne has not remarried.
The pertinent provision of decedent's will reads as follows:
"1. To convert my said residuary estate, except as the same may be already invested in securities approved by law for trustees, into cash and to invest, re-invest and keep invested the proceeds thereof
in securities approved by the laws of the State of New Jersey at the time of my death for trustees. * * *."
The corpus of the estate is approximately the sum of $208,000. The income for the first four-year period of the administration of the trust amounted to $12,150 annually. In succeeding years, by reason of the restricted investments, the yield has been substantially reduced and for the year 1950 approximated the sum of $5,700. Correspondingly, the share of income of the two life tenants has been reduced from the maximum of $400 per month to the current sum of approximately $265 per month. The trustee seeks authority to reinvest the corpus of the trust fund in securities that are now and may from time to time be statutorily designated as legal securities for fiduciaries. It contends that the limitation upon the trust investments to those approved by the laws of the State of New Jersey at the time of the testatrix' death has imposed and continues to impose greater limitations upon the trustee and hardship upon the life tenants, as well as danger to the corpus. The guardian ad litem of the infant remaindermen filed only a formal answer and did not participate in the hearing or on the argument of the appeal.
Mrs. Osborne, daughter-in-law of the testatrix, testified that she has no income other than that received from this trust fund; that she owns her own home in Glen Ridge, this State, on which there is a mortgage; that with the reduced income that she is now receiving, she has not been able to properly maintain herself over the past few years, stating "I have cut myself down to two meals a day to economize and never have any meat nor dessert"; that, when it is necessary to make repairs around the house, it becomes necessary for her to borrow money and to repay same with interest; that she has no savings or reserves out of which she can pay for medical expenses; that it ...