mate similitude of conditions." The conditions in the case at bar are not the conditions governed by section 13, where an executor is acting as trustee. The complainants were not trustees and were not acting as such. They were inhabitants of this commonwealth, but the testator was domiciled in a foreign state, where his will was probated. They received no appointment from the courts of this commonwealth. A trustee was appoint executor to administer the estate did not bring them within the provisions of section 13. Welch v. Boston, 221 Mass. 155, 109 N. thorize a tax on the executors in the case at bar. In Welch v. Boston the plaintiffs held the property as trustees; they did not hold it as executors in the process of settlement of the estate. See Newcomb v. Paige, 224 Mass. 516, 113 N. E. 458; Hart v. Tax Commissioner, 240 Mass. 37, 132 N. E. 621. seventh of 1 per cent. of the personal estate, consisting of a deposit in a national bank in Boston, was the only portion of his personal estate in this jurisdiction. The stocks and bonds of the testator were at the time of his death deposited in a safe-deposit box in Newport, R. I. The shares of the American Can Company were general assets of the estate and were not specifically bequeathed. The proceeds from the sale of the shares were deposited in a bank in Boston by the execu-ed under the will and the ordinary duties of tors and subsequently drawn on by them for the payment of debts, legacies, and expenses of administration. No ancillary administration has been taken out in this common- D. 174, Ann. Cas. 1917D, 946, does not auwealth. The trustee named in the will (a corporation of New York) has accepted the trust, and since 1922 the executors have paid over to it the greater part of the residue of the estate. No appointment of such trustee has been made by any court, and it is not required by the law of the testator's domicile. The contention of the defendant is that, as the executors are inhabitants of this commonwealth, they are liable to a tax on the income received from the sale of intangible personal property belonging to the estate; that by G. L. c. 62, § 13, the executors who are such inhabitants, appointed under a foreign will, are taxable. G. L. c. 62, § 10, provides that income received by trustees, any one of whom is an inhabitant of this commonwealth or has been appointed by a court of this commonwealth, shall be subject to a tax. By section 11, if an inhabitant of this commonwealth receives income from a trustee who is not an inhabitant of this commonwealth or has not received his appointment from a court of this commonwealth, the income shall be taxed. Section 12 gives to the trustee the right to claim the exemption provided by subsection (a) of section 8. Section 13 enacts that these sections (10 to "Our income tax law is founded upon inter12 inclusive) "shall, so far as apt," apply to state comity. * * * It taxes only residents executors, "to the income received by them of this commonwealth in respect of property and to their beneficiaries." Section 13, mak-in which they have a beneficial interest. It ing section 10 applicable, does not authorize * But it a tax on the complainants upon the income from the sale of intangibles. Sections 10 to 12 apply to trustees and by section 13 these sections apply to executors only "so far as apt." There are many instances where executors act as trustee. See Ricketson v. Merrill, 148 Mass. 76, 19 N. E. 11; Lathrop v. Merrill, 207 Mass. 6, 92 N. E. 1019. There is nothing in the agreed statement of facts indicating that the executors were to act as trustees; their only appointment was that of executors, and their authority to act was confined to the performance of their duty as such executors. The gain on the sale of intangibles on which was levied the assessment is not income by the law of the testator's domicile, as between the life tenant and the remainderman: nor is said gain income to be paid as such to a legatee or beneficiary to whom income is payable under the will; and even if the income were accumulated in trust for the benefit of unborn or unascertained persons with contingent interests, these circumstances would be insufficient to warrant the tax against the plaintiffs on the facts agreed to in this case. The executors held the funds in their hands as executors under a foreign appointment, and there is no provision in our tax statute authorizing a tax on such executors, while so acting, because they are inhabitants of this commonwealth. As was said in Maguire v. Tax Commissioner, 230 Mass. 503, 513, 120 N. E. 162, 167: exempts resident trustees. The complainants were not taxable under G. L. c. 62, § 5, cl. (c). Without considering the many objections urged against the validity of this tax (see Welch v. Adams, 152 Mass. 74, 83, 25 N. E. 34, 9 L. R. A. 244; Bliss v. Bliss, 221 Mass. 201, 204, 109 N. E. 148, L. R. A. 1916A, 889; Old Colony Trust Co. v. Commissioner of Corporations & Taxation, 245 Mass. 155, 139 N. E. 441), it is sufficient to say that, the residence of the exec It was said in Wheelwright v. Tax Com-utors being in this commonwealth, they remissioner, 235 Mass. 584, at page 587, 127 N. E. 523, that the word "apt," in the phrase "so far as apt" in section 13, suggests "inti ceiving no appointment from our courts and the testator's will being probated in a sister state, the executors acting as such and not as (146 N.E.) trustees, according to the statement of facts, | tate, real, personal and mixed wherever situcannot be taxed under the statutes of this ated and whenever and however acquired." commonwealth. At the time the will was executed, both named beneficiaries were living, and were the nearest of kin of the testatrix; but Fred W. Chesley died without issue before her death. At her death her heirs at law and next of kin were her nephew, William P. Chesley, and a grandnephew, Edgar A. Gibson. A citation on the petition was served as ordered by the Probate Court. The respondent, William P. Chesley, filed an answer, and the petition was taken for confessed as to Charles W. Chesley, Edgar A. Gibson, and all other parties interested who have not appeared. A substantial sum of money is left to be distributed under the residuary clause hereinbefore quoted. After hearing the probate court entered a final decree that: "The residue of the estate be distributed three-fourths to William P. Chesley and onefourth to Edgar A. Gibson; that is to say, that the one-half of the residue which Fred W. Chesley would have been entitled to receive had he survived the testatrix, is to be distributed as intestate property." William P. Chesley appealed from this de cree. [1-3] The only question argued on this appeal is whether by the residuary clause the whole residue passes to William P. Chesley as the sole surviving member of a class, or whether he takes one half of the residue and the other half is to be distributed as intestate property. The general rule is, that where there is a gift by will of a fund or residue to several legatees who are named, Appeal from Probate Court, Suffolk Coun- to be divided among them in equal shares, ty; A. W. Dolan, Judge. Petition by Fred A. Hobbs, executor, against William P. Chesley and others, for construction of the will of Mary E. Chesley, deceased. From decree of distribution, defendant named appeals. Affirmed. C. E. Haywood, of Boston, for appellant. the gift is to them as individuals and not as a class. In such cases if one of the legatees dies before the testator the legacy intended 546; Frost v. Courtis, 167 Mass. 251, 45 N. for him lapses. Jackson v. Roberts, 14 Gray, E. 687; Best v. Berry, 189 Mass. 510, 75 N. E. 743, 109 Am. St. Rep. 651; Boston Safe Deposit & Trust Co. v. Reed, 229 Mass. 267, 118 N. E. 333. The testatrix had by former clauses in her will given substantial legacies to each of the nephews named in the residuary clause, describing him in each case as her nephew and naming him. She had also given a small legacy to Edgar A. Gibson, referring to him as her grandnephew. There is nothing in the other clauses of the will to indicate that the testatrix had in mind a class as the object of her bounty, rather than the individuals named, or that she intended to benefit the nephews surviving at her death rather than to benefit the two individual nephews, who were "Fourth. I give and bequeath and devise to named. my said nephew, William P. Chesley and Fred Boston Safe Deposit & Trust Co. W. Chesley, their heirs and assigns forever, V. Reed, supra. The bequest was to William all the rest, residue and remainder of my es- P. Chesley and Fred W. Chesley as named SANDERSON, J. This is a petition for the construction of the will of Mary E. Chesley, who died December 6, 1922, brought by the executor of her will against William P. Chesley, Charles W. Chesley, and Edgar A. Gibson. The will, dated February 1, 1917, was duly approved and allowed, and the petitioner, Fred A. Hobbs, appointed executor on February 1, 1923. The testatrix, after making several bequests, provided in the fourth clause of her will as follows: For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes beneficiaries, and the word "nephew" is used to identify them and not to describe a class. It follows that the one half of the residue which Fred W. Chesley would have been entitled to receive must be distributed as intestate property and be divided equally between William P. Chesley and Edgar A. Gibson. The decree of the probate court is to be affirmed. Additional costs out of the fund are to be in the discretion of the court. Ordered accordingly. SKOPETZ v. AMERICAN EXPRESS CO. (Supreme Judicial Court of Massachusetts. Suffolk. Jan. 30, 1925.) 1. Banks and banking 1882-Express company had implied assent of plaintiff to transmit rubles through its correspondent. Where contract with plaintiff authorized express company to transfer to foreign bank rubles purchased of defendant through latter's correspondent, or to use means of transmission recognized as suitable among merchants and banks, it had implied assent of plaintiff to transmit rubles through its correspondent. 2. Banks and banking 1882-Express company held not liable for its correspondent's default, after it became plaintiff's agent to transmit funds. Correspondent of express company, being suitable agent to transmit rubles purchased by plaintiff, became plaintiff's agent when it received and recognized direction of defendant to transfer rubles to foreign savings bank, and defendant was not thereafter responsible for default or negligence of correspondent. The undisputed facts as they appear in the report are as follows: On January 19, 1917, the plaintiff paid the defendant at its Boston office the sum of $797.59 and received a receipt, the material part of which read: "Received of Semers V. Skopetz Ro 2690, @ 29.65, valued at seven hundred ninety seven and 59/100 dollars, Government Savings Bank, Petrograd, Russia. Return bank book." In explanation of this receipt counsel for the defendant stated in court to the judge: "That this receipt is meant to cover a payment by the plaintiff to the defendant of $797.59, with which the defendant was to effect a deposit in the Government Savings Bank in Petrograd, Russia, of 2,690 Russian rubles, which was the amount of Russian rubles which $797.59 would buy on that day at the rate of exchange of .2965, and they were to return a bank book or cause a bank book to be returned to the plaintiff." The plaintiff went to the American Express Company three times to get the bank book, the first time within four months after he paid the money to the defendant, again after two years, and again after another two years. He never got back his money or a bank book. He never attempted to find out whether the rubles were in fact deposited in the bank in Petrograd, and he did not know that there was a revolution in Russia when this money was paid. It appeared in evidence that the New York office of the American Express Company on January 23, 1917, wrote its correspondent in Petrograd, the Azoff Don Commerz Bank, as follows: "Upon receipt of this letter, kindly arrange Report from Superior Court, Suffolk Coun- to effect the following, and in settlement debit ty; Franklin T. Hammond, Judge. Action of contract by Semers V. Skopetz against the American Express Company for money had and received to plaintiff's use. Verdict was directed for defendant, and case reported. Judgment for defendant. J. M. Graham, of Boston, for plaintiff. PIERCE, J. This is an action for money had and received by the defendant to the plaintiff's use, amounting to $797.59. At the close of the evidence, on motion of the defendant the judge directed a verdict in its favor, and reported the case to this court on the agreement of the parties that: "If the verdict for the defendant was wrongfully directed, judgment is to be entered for the plaintiff in the sum of seven hundred ninety-seven dollars fifty-nine cents ($797.59), with interest from the date of the writ; but that if said verdict for the defendant was rightly directed, judgment is to be entered on the verdict as directed." us in account with your goodselves: "No. 10-To the Imperial Savings Bank of Moscow, Russia, for the account of Mr. Frank S. McKonna, rubles 130,000.00. "No. 11-To the Government Savings Bank of Petrograd, Russia, for the amount of Vasily D. Grelchenko, rubles 2,430.00. "No. 12-To the Government Savings Bank of Petrograd, Russia, for the account of Seman V. Skopetz, peasant, specimen signatures of depositor herewith attached, the sum of twenty-six hundred ninety rubles (rubles 2,690.00). "Kindly obtain and send us bank books covering the above deposits." On May 15, 1917, the correspondent wrote the defendant as follows: "Referring to your instructions of the 23d, January last (mail transfer No. 10) and further to our telegram of the 16/29th March, we cabled you to-day in these terms: 'We repeat our twenty-ninth March Moscow Savings Bank refuses accept 130,000 rubles account McKonna without application written in Russian and nationality certificate. Please cable instructions.'" (146 N.E.) It further appeared in evidence that at all times the American Express Company had a sufficient amount of rubles to its credit on deposit with the Azoff Don Commerz Bank to cover all its outstanding obligations, including the one in question; that the American Express Company never received from the Government Savings Bank of Petrograd, Russia, a bank book covering the remittance in this case; that it has no information whether or not the deposit was made by the Azoff Don Commerz Bank, its correspondent, in the Government Savings Bank of Petrograd, Russia, for the plaintiff, or whether a bank book was forwarded from Russia. It was agreed that the plaintiff has never received the bank book, that he is without information as to whether the rubles stand to his credit in the Government Savings Bank of Petrograd, Russia, and whether a bank book has been forwarded from Russia. It was also agreed that the defendant could have drawn its draft on the Azoff Don Commerz Bank and sent it direct to the Government Savings Bank, Petrograd, Russia, with instructions to deposit the same to the credit of this plaintiff, and return the bank book. [1] The contract with the plaintiff required the defendant to transfer to the Government Savings Bank the rubles purchased of the defendant on January 19, 1917. This contract authorized the defendant to transfer the rubles to the Savings Bank through its correspondent at Petrograd, or to use any means of transmission which is recognized as suitable among merchants and bankers. While in the case at bar the defendant could have sent its own servants to the Savings Bank at Petrograd, and could have sent its draft on its correspondent direct to the Savings Bank, it cannot be said that the means of transmission adopted was not suitable and was not reasonably necessary to have been employed. In the circumstances we are of opinion the defendant had the implied assent of the plaintiff to transmit the rubles through its correspondent in Petrograd. [2] The correspondent being a suitable agency, and being in funds of the defendant, became the agent of the plaintiff when it received and recognized the direction of the defendant contained in the letter to it dated January 23, 1917; and the defendant had performed its duty and was not responsible for the default or negligence of the correspondent. Fabens v. Mercantile Bank, 23 Pick, 330, 34 Am. Dec. 59; Dorchester & Milton Bank v. New England Bank, 1 Cush. 177; Lord v. Hingham National Bank, 186 Mass. 161, 71 N. E. 312. It is apparent that a bank book would not be issued and could not be returned or caused to be returned before the rubles were in fact deposited to the credit of the plaintiff in the Savings Bank in Petrograd, Russia; and it is clear that it was the duty of the subagent of the plaintiff, the correspondent of the defendant, to demand of the Savings Bank "the bank book" when it paid the rubles, and to cause the same to be sent to the defendant as the agent of the plaintiff. The defendant is not responsible for the default of the subagent, if it be in default, in this regard. We think the verdict was directed rightly for the defendant. Commissioner of Banks v. American Express Co., 249 Mass. 177, 143 N. E. 925. In accordance with the terms of the report, "judgment is to be entered on the verdict." So ordered. OSBORNE et al. v. CRAIG. (Supreme Judicial Court of Massachusetts. Essex. Jan. 31, 1925.) 1. Executors and administrators ~20(10)— Decision of probate court in determining whether executor or administrator is unsuitable not disturbed, unless erroneous and unsupported by evidence. Sound discretion rests in probate court, when called on to decide whether executor or administrator is unsuitable, and his decision Evidence that executor named in will had failed to administer another estate with diligence and proper efficiency, and that he was antagonistic to cestui que trust, held, in view of G. L. c. 192, § 4, and chapter 195, § 11, to sustain finding that he was person unsuitable for appointment. Appeal from Probate Court, Essex County; H. R. Dow, Judge. In the matter of the estate of one Osborne, deceased. Proceeding by Archer P. Osborne and another for appointment as executors, opposed by Eva W. Craig. From a decrée appointing petitioner named as sole executor and refusing to appoint Roy W. Osborne, the latter appeals. Affirmed. H. L. Burnham, of Boston, for appellant. E. C. Jacobs and W. F. Carleton, both of Lynn, for respondent. CARROLL, J. The testator died August 5, 1923. In his will his sons Roy W. Osborne and Archer P. Osborne were named as executors and trustees. His widow was given one-third of the estate, the remaining twothirds to be divided among his children. The share of his daughter Eva W. Craig was to be held in trust, the income to be paid to her during her life, and at her death the principal was to be held for her children. For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes * * * their father's funeral they were not on If the income was not sufficient to support | of this delay his sister lost a purchaser for her, the trustees were given discretionary the property which was a part of her aunt's power to pay to her any portion or the estate; that when he and his sister met at whole of the principal. The executors, by a codicil, were given discretionary power to divide among the children certain personal property. In 1918 Roy W. Osborne, the appellant, was appointed executor of his aunt's will. The probate court found that he had failed, without adequate excuse, to administer that estate promptly; that his inventory and account were not filed until the year 1922, "and were only filed then because of the insistence of his sister, Eva W. Craig, and her attorney, although he knew that Mrs. Craig had an advantageous offer to sell a parcel of real estate the title to which in some manner depended upon the completion of his work as executor. By reason of his delay Mrs. Craig lost her opportunity to sell the property." The court further found the appellant and his sister, Mrs. Craig, do not speak to each other, are mutually antagonistic; that the testator's widow, the stepmother of the appellant, objected to his appointment; that it was doubtful if the appellant "would give proper consideration to the rights and wishes of his sister, Mrs. Craig, if called upon to exercise the discretionary powers given to him in the will and codicil." A decree was entered that Roy W. Osborne was not suitable for the trust; letters testamentary to be issued to Archer P. Osborne. From this decree appointing Archer P. Osborne the sole executor, Roy W. Osborne appealed. [1] The decision of the probate court in refusing to appoint the appellant one of the executors of his father's will, and appointing Archer P. Osborne sole executor, should not be reversed unless it is plainly wrong. Allen v. Allen, 117 Mass. 27; Dexter v. Codman, 148 Mass. 421, 19 N. E. 517. A sound discretion rests in the probate court when called upon to decide whether an executor or ad ministrator is unsuitable. All the evidence is reported, and it is our duty to examine it and decide the case according to our own judgment, but the discretion of the judge who heard the evidence and saw the witnesses is entitled to great weight, and his decision will not be disturbed unless we are satisfied that it was clearly erroneous and not supported by the evidence. Winship v. Bass, 12 Mass. 198; Allen v. Allen, supra; Wilbar v. Diamond, 249 Mass. 568, 144 N. E. 462. [2] A careful examination of the testimony satisfies us that the probate court was warranted in finding that the appellant was not a suitable person to be appointed executor. There was evidence showing that he failed to administer another estate with due diligence and with proper efficiency; that because The probate court can remove an executor if he becomes "insane or otherwise incapable of performing the trust, or is unsuitable therefor." G. L. c. 195, § 11. The court has the power to refuse to appoint an executor named by the testator if he is incapable of performing the trust, or is unsuitable. It can remove such a person, although duly appointed; and it can refuse.· upon adequate evidence, to appoint him, if satisfied he is for any reason unsuitable. G. L. c. 192, § 4, providing that if a will has been duly approved and allowed, letters testamentary shall be issued to the executor named therein, "if he is legally competent and a suitable person." See in this connec tion Bowditch v. Banuelos, 1 Gray, 220, 231, 232; Cogswell v. Hall, 183 Mass. 575, 67 N. E. 638. Decree affirmed. PUTNAM V. HANDY. (Supreme Judicial Court of Massachusetts. Suffolk. Jan. 30, 1925.) Bankruptcy 154-Defendant could not set off indebtedness from bankrupt in suit by trustee for violation of fiduciary duty; "mutual debt;" "mutual credits." In suit by trustee in bankruptcy against bankrupt's president for violation of fiduciary duty, indebtedness due him from bankrupt could not be set off under G. L. c. 232, § 1, as a "mutual debt" or "credit," within Act Cong. St. §§ 9652, 9585, as terms "mutual debts" and July 1, 1898, §§ 68a, 1 (11) being U. S. Comp. "mutual credits" are correlative, and to authorize set-off there must be mutuality or obligation in same right. [Ed. Note.-For other definitions, see Words and Phrases, First and Second Series, Mutual Credits; Mutual Debts.] Appeal from Superior Court, Suffolk County; F. T. Hammond, Judge. |