Krug v. Mercantile Trust & Deposit Co.

The Mercantile Trust and Deposit Company, in one of the trusts held by it, holds some of the capital stock of the Maryland Casualty Company. The plaintiff is the life beneficiary of the trust. In February of 1910 the Maryland Casualty Company increased its capital stock, and duly gave its stockholders a prior right to purchase the new stock in proportion to their holdings. These prior rights commanded a premium on the market, so the trustee in this case took up its rights, sold them on the market, and realized the profit. The plaintiff claims the profit as income accruing on the trust property and belonging to the life beneficiary. But it seems to be well settled upon the authorities cited that such profit on a right to subscribe is not income but corpus; and it accrues not to the life beneficiary but to the remainderman. A decree ordering distribution of it accordingly will therefore be signed when presented.