Opinion
April 22, 1943.
May 24, 1943.
Wills — Construction — Vested or contingent interest in remainder — Time annexed to gift or to payment — Words and phrases — "Absolutely and in fee" — Termination of trust.
1. The law favors vested rather than contingent estates, and an estate will not be held to be contingent if such determination can be avoided by a reasonable construction of the will. [367]
2. A legacy or bequest will be held contingent or vested as time is annexed to the gift or only to the payment of it, and the question whether or not a testator intended that the ultimate devisee should survive the time of actual distribution in order to possess a vested interest is not to be judged by the mere form of expression employed at any one point, but by the whole scheme of the devise or will. [367-8]
3. The postponement of distribution or full enjoyment will not cause a delay in the vesting of an antecedent gift. [368]
4. The words "absolutely and in fee" do not usually indicate the elimination of a contingency, but rather a possession of the whole title as opposed to an equitable title. [368-9]
5. Where testatrix bequeathed a stated sum in trust to pay the income to her sister during her life, and then provided that if her sister should predecease her, the income should be paid to the two named children of her nephew, until they respectively arrived at the age of thirty years, when the principal was to be paid to them absolutely and in fee, and further provided that, in the event the sister survived her and thereafter died when the two children of the nephew had arrived at the age of thirty years, the principal should be paid over to them, but in the event they had not reached the age of thirty years at the time of the sister's death the share of either or both children was to be held in trust until they arrived at the age of thirty years and be distributed and paid over to them absolutely and in fee; and it appeared that the sister survived the testatrix and subsequently died before the two children of the nephew were thirty years of age; it was Held that (1) the principal of the trust estate vested in the children of the nephew upon the death of the life tenant, the sister, (2) their interest was not contingent on their arrival at the age of thirty years, and (3) the trust estate was properly terminated by the orphans' court upon the request of all parties in interest. [365-9]
Appeals — Parties — Interest — Orphans' court — Decree terminating trust and distributing principal.
6. An appeal from a decree of the orphans' court terminating a trust estate and distributing the principal by one who has no interest in the property which is the subject of the controversy will be quashed. [369]
Mr. Justice ALLEN M. STEARNE took no part in the consideration or decision of this case.
Argued April 22, 1943.
Before MAXEY, C. J.; DREW, LINN, STERN, PATTERSON and PARKER, JJ.
Appeal, No. 141, Jan. T., 1943, from decree of O. C. Phila. Co., 1937, No. 2128, in Estate of Anna C. Allen, deceased. Appeal quashed.
Audit of account of trustee. Before STEARNE, J.
Exceptions to adjudication dismissed and adjudication confirmed absolutely, before VAN DUSEN, P. J.; STEARNE, SINKLER, KLEIN, BOLGER and LADNER, JJ., opinion by VAN DUSEN, P. J. Exceptant appealed.
John J. McDevitt, Jr., for appellant, husband of Testatrix.
Glenn A. Troutman, with him Nathan J. Bonx, for appellees, remaindermen.
William D. Harkins and G. Nicholaus Nicholson, for Trustee.
We must quash this appeal for the reason that the appellant has no interest in the property which is the subject of the controversy: Behringer's Est., 265 Pa. 111, 108 A. 414; Real Est. Tr. Co. v. Pa. Sugar R. Co., 239 Pa. 456, 86 A. 1074.
The pivotal question involved is whether certain legatees took a vested interest in remainder under the will of Anna C. Allen. Testatrix, after making certain personal bequests, directed her executors to convert the balance of her property into cash, and then provided, in part, as follows: "I give and bequeath the sum of $8,000.00 from the above residuary fund unto my Executors and Trustees hereinafter named, or the survivor of them, in Trust . . . to pay over the net income thereof from time to time unto my beloved Sister, Rosa Mehnert, for and during the full term of her natural life". She then provided that if Rosa should predecease her the income should be paid to Eleanor and Carl Howard Mehnert, until they respectively arrive at the age of thirty years, when the principal is to be paid to them "absolutely and in fee". The will continued: "In the event that Rosa Mehnert survive me, immediately upon her death, should the two children, Eleanor and Carl Howard Mehnert, children of Carl P. Mehnert, have arrived at the age of thirty (30) years, then this Trust, shall cease and come to an end and the principal thereof shall be paid over share and share alike to the two children of my nephew, to wit: Carl Howard Mehnert and Eleanor Mehnert, but should they not have arrived at the age of thirty (30) years, at the time of the death of Rosa Mehnert, then I direct that the share of either or both of them be held in Trust by my said Executors and Trustees until, he, she, or they, shall have arrived at the age of thirty (30) years and be distributed and paid over to them as above set out, absolutely and in fee".
By another paragraph, as altered by a codicil, the residue of the estate was given to Eleanor and Carl Howard Mehnert. The testatrix, claiming her husband, the appellant, had deserted her, excluded him from participation in any part of her estate. The husband elected to take against the will.
The surviving husband and all parties in interest then entered into a written agreement, in the nature of a family settlement, for the distribution of the estate. We will refer to the pertinent portions of this settlement. The residuary estate was to be divided as follows: two-thirds to Frank J. Allen, and one-third to be divided equally between Eleanor and Carl Howard Mehnert. The agreement then continued: "The specific bequests given and the trust fund created in the will of the above named decedent shall in no wise be affected by the election to take against the will or this agreement settling the rights of the parties thereby affected." It was also provided that a parcel of real estate, at a valuation of $3,500, and cash in the amount of $4,500 should be appropriated to create the $8,000 trust.
Rosa Mehnert survived the testatrix. When Rosa died, Eleanor and Carl H. were not yet thirty years of age. On the death of Rosa, the trustee stated an account and asked for a dissolution of the trust estate, in which request the trustee was joined by Eleanor and Carl H. Mehnert. The orphans' court terminated the trust and awarded the principal of the estate to Eleanor and Carl H. Mehnert.
The appellant argues that since the grandniece and grandnephew had not reached the age of thirty years on the death of Rosa, the trust estate did not vest in them, that the estate was not then terminable, and that if either of them failed to live to thirty years of age the appellant would be entitled to take an interest in the principal. We all agree with the court below that the principal of the trust estate vested in Eleanor and Carl Howard upon the death of the life tenant, Rosa, and that such interest was not contingent on their arrival at the age of thirty years.
Before examining the facts, we will refer to some of the guides to be employed in solving the problem. "(2) The law favors vested rather than contingent estates, and will not suffer the inheritance to be in abeyance if, by any reasonable construction of the will, it can be avoided. (3) A legacy or bequest will be held contingent or vested as time is annexed to the gift or only to the payment of it, and the question whether or not a testator intended that the ultimate devisee should survive the time of actual distribution in order to possess a vested interest is not to be judged by the mere form of expression employed at any one point, but by the whole scheme of the devise or will" [Italics supplied.]: Brown's Est., 289 Pa. 101, 114, 137 A. 132.
The clause of the will which we must construe provided for three situations: (1) If Rosa died before testatrix; (2) if Rosa survived her, and Carl and Eleanor were thirty years of age when Rosa died; and (3) if Rosa should survive her, but Carl and Eleanor should not then be thirty years of age, the situation which actually developed. In each case she uniformly provided that the remainder should go to Carl and Eleanor, but that they should not receive it until they were thirty years of age. In none of the three clauses did she make any gift over if they did not attain the age of thirty years. See Carstensen's Est., 196 Pa. 325, 335, 46 A. 495.
Under the clause which became operative, she directed that the share of either or both of them should be held in trust, thereby indicating an antecedent gift vested in interest but deferred in enjoyment. Such postponement of "distribution" or full "enjoyment" will not cause a delay in vesting: Brown's Est., supra, p. 113. In Lloyd's Est., 326 Pa. 230, 192 A. 98, it was held that a vested remainder was given the children by a will creating a trust to "pay over the net income thereof unto my beloved wife . . . for and during the term of her natural life . . . and at and after the decease of my said wife, then in trust to be equally divided between my children . . . as they respectively arrive at the age of twenty-one years, share and share alike, absolutely and in fee."
There is a marked similarity between that case and the situation we are examining. It is even clearer here that the estates are vested, for we are not depending alone on the direction as to when to pay; the gift is antecedent to and independent of the direction to distribute.
Appellant also predicates an argument on the use of the expression "absolutely and in fee", but these were the exact words used in Lloyd's Est., supra. They do not usually indicate the elimination of a contingency, but rather a possession of the whole title as opposed to an equitable title. That testatrix so used the words is also shown by the fact that she employed the same expression in the residuary clause.
The orphans' court properly terminated the trust estate: Shallcross's Est., 200 Pa. 122, 49 A. 936; Bennett's Est., 41 Pa. Super. 579; Stafford's Est., 258 Pa. 595, 102 A. 222. There would be no purpose served in continuing the trust. Appellant having no interest in the $8,000 trust, the fund for distribution, the appeal must be quashed.
Appeal quashed at cost of appellant.