PRINCIPAL AND INCOME 2875

other than in shares of the corporation itself, or interest on money loaned,
or interest on or the rental or use value of property wrongfully withheld
or tortiously damaged, or otherwise in return for the use of principal, shall
be deemed income unless otherwise expressly provided in this Article.

(2) All receipts of money or other property paid or delivered as the
consideration for the sale or other transfer, not a leasing or letting, of
property forming a part of the principal, or as a repayment of loans, or in
liquidation of the assets of a corporation, or as the proceeds of property
taken on eminent domain proceedings where separate awards to tenant and
remainderman are not made, or as proceeds of insurance upon property
forming a part of the principal except where such insurance has been
issued for the benefit of either tenant or remainderman alone, or otherwise
as a refund or replacement or change in form of principal, shall be deemed
principal unless otherwise expressly provided in this Article. Any profit
or loss resulting upon any change in form of principal shall enure to or
fall upon principal.

(3) All income after payment of expenses properly chargeable to it
shall be paid and delivered to the tenant or retained by him if already in
his possession or held for accumulation where legally so directed by the
terms of the transaction by which the principal was established; while the
principal shall be held for ultimate distribution as determined by the
terms of the transaction by which it was established or by law.

1939, ch. 580, sec. 4.

4. (Apportionment of Income.)

(1) Whenever a tenant shall have the right to income consisting of
periodic payments (and for the purpose of this Article periodic payments
shall include rents, ground rents, interest on bonds and loans, and annuities,
but shall not include dividends on corporate shares), and such right shall
cease and determine by death or in any other manner at a time other than
the date when such periodic payments should be paid, he or his personal
representative shall be entitled to that portion of any such income next
payable which amounts to the same percentage thereof as the time elapsed
from the last due date of such periodic payments to and including the day
of the determination of his right is of the total period during which such
income would normally accrue. The remaining income shall be paid to
the person next entitled to income by the terms of the transaction by which
the principal was established. But no action shall be brought by the trustee
or tenant to recover such apportioned income or any portion thereof until
after the day on which it would have become due to the tenant but for the
determination of the right of the tenant entitled thereto. The provisions
of this section shall apply whether an ultimate remainderman is specifically
named or not.

(2) Likewise when the right of the first tenant accrues at a time other
than the payment dates of such periodic payments, he shall only receive
that portion of such income which amounts to the same percentage thereof
as the time during which he has been so entitled is of the total period during
which such income would normally accrue; the balance shall be a part of
the principal.

(3) But when periodic payments of income are payable in advance
with respect to the period for which they are payable, then the apportion-
ment hereinbefore directed shall be as if the periodic payment in question
had been payable at the end of such period.