Garrett

In this case we hold that a trustee of a testamentary trust having income producing assets must account for all gross income of the trust and not merely for net income.

We further hold that as to objecting income beneficiaries of the trust neither the doctrine of res judicata nor the statute of limitations is applicable.

Statement of Facts

On September 10, 1969, the testator died leaving a will which created a testamentary trust. Bank of America National Trust and Savings Association was named trustee. The corpus consisted of a piece of real property, known as Hawaiian Village Apartments. The trust provides for payments to the wife of the testator of $500 per month and the trustee is directed to employ said wife as the office manager and operator of the real property known as Hawaiian Village.

From November 5, 1971, to November 15, 1977, the trustee filed seven alleged annual accountings. The total income and total expenses of the trust asset were not revealed in any of these accounts. However, a monthly rental statement and periodic profit and loss statements were sent to each beneficiary by the wife. The trustee did not include any profit and loss information in the…