Opinion
April 17, 1951.
June 27, 1951.
Decedents' estates — Partial accounting — Orphans' court — Decree of distribution — Finality — Res judicata — Award of legacies — Impounding with accountant — Effect.
1. A decree of distribution following the adjudication of a partial account is a final decree, and the matters determined in that proceeding cannot again be drawn into controversy between the parties and privies to the decision in a distribution upon a subsequent account. [50]
2. The fact that an award of legacies provides for their temporary impounding with the accountant, because of the impossibility of transmitting funds to foreign legatees at the time of distribution, does not prevent the award from being an actual and final distribution. [52]
3. Such an impounding of funds with the accountant does not permit a re-examination of the original award at a subsequent accounting. [52-3]
Argued April 17, 1951. Before STERN, STEARNE, JONES, BELL, LADNER and CHIDSEY, JJ.
Appeals, Nos. 157, 158 and 159, Jan. T., 1951, from decree of Orphans' Court of Lackawanna County, 1934, No. 902, in Estate of Myer Davidow, Deceased. Decree affirmed.
Audit of fourth partial account of trustees. Before BRADY, P. J.
Adjudication filed awarding funds to specified heirs and next of kin of deceased legatees; exceptions to adjudication dismissed and final decree entered. Exceptants appealed.
C. Leo Sutton, with him Morris B. Gelb, Richard L. Levy and Paxson, Kalish, Dilworth Green, for Jewish Federation of Scranton, appellant.
Paul A. McGlone, for Trustee ad litem, appellant.
N.H. Cowdrey and Herman J. Goldberg, for Trustees, appellants.
Philip V. Mattes, with him R. Carl Griffith, for I. Davidow, appellee.
Leonard L. Silverstein, with him J. Julius Levy, for Liba Vorabay, appellee.
Gordon A. Block and Wolf, Block, Schorr Solis-Cohen, for Gita Rosen et al., appellees.
We have before us three appeals from the decree of distribution of President Judge BRADY of the Orphans' Court of Lackawanna County, pursuant to the adjudication of the 4th partial account of the Trustees under the will of Myer Davidow, deceased. Appeal No. 157 is filed by Sol Davidow et al., the accounting trustees; appeal No. 158 by Frank J. McDonnell, Trustee Ad Litem for the unascertained beneficiaries; No. 159 by the Jewish Federation of Scranton, Pa., entitled in remainder under Myer Davidow's will. These appeals all raise the same questions and will be disposed of together.
From the comprehensive adjudication of the learned court below we state the following facts so far as relevant to this appeal. The fund accounted for and distributed arose from a previous award made in the adjudication of a second account confirmed March 31, 1941. In that adjudication it appeared the accountants represented to the court that certain named legatees then entitled to legacies aggregating $170,000 resided in foreign countries and by reason of the world conditions it was impractical to send the funds to them and requested impounding the legacies in the hands of the trustees for the respective legatees' benefit. Whereupon Judge LEACH, then specially presiding, stated in his adjudication, "By reason of the world conditions at the present time, it being impractical to send funds to foreign countries in which these legatees live, and to carry out the intent of the testator, the accountants request that the legacies to the said persons living in foreign countries be impounded with the trustees pending the further order of this Court as to a disposition of these legacies to them, and to be distributed, together with the increment that shall accrue thereon from the date of the final confirmation of the audit, to the said legatees when and as directed by the order of court."
Thereafter followed the award in the following language: "And the bequests amounting to $170,000.00 shown in the 13th finding of fact herein (adjudication of March 18, 1941) are to be impounded in the hands of the Trustees for the benefit of the foreign legatees, to be distributed, together with the increment that shall accrue thereon from the date of the final confirmation of the audit, to the said legatees when and as directed by order of court, as follows, viz.: . . ." after which is recited the names of each distributee with the legacy to which he or she was entitled set opposite the legatees' name.
When the present accounting was filed there remained still impounded in the hands of the trustees, $93,522.36 principal balance of the $170,000 originally awarded. The rest had been paid out to parties entitled. Of this balance on hand Judge LEACH had awarded $15,000 for the benefit of Benjamin Davidow (decedent's brother), and $10,000 each for Benjamin's three children, Rebeka, Leiba and Chaje. This total of $45,000 was claimed at the audit before Judge BRADY by Israel Davidow of Tel-Aviv through his attorneys in fact. Israel, a son of Benjamin, is the sole next of kin of his father, sisters and brother. Judge BRADY found that Benjamin had been killed March 22, 1944, by the Nazi army in Lithuania and all his family save only Israel (the claimant) had been massacred by the Nazi army, and that Israel was the sole next of kin. Similar findings were made with respect to Jacob and Israel Vorabay, two other legatees, who were killed by the Nazi army on August 18, 1941, and their nearest kin was their mother, Liba Vorabay, who claimed their legacies. Also it was found that Ida Zack, another legatee, died March 5, 1945, a civilian prisoner in a concentration camp in Germany, leaving to survive her as her only next of kin her daughters, Gita Rosen and Lea Block, who claimed their mother's legacy. Upon these findings the auditing judge lifted the impounding order and awarded the respective next of kin the legacies claimed by them. To which action exceptions were filed, dismissed, and adjudication confirmed absolutely.
The appellants contend the court below erred in not giving full effect to the following provisions of Myer Davidow's will which applies to all of the legacies in question, viz., Item 13, subdivisions 20-m and 20-n, which provide as follows:
"m. In the event of the death of the beneficiaries named in subdivisions c and g, hereinabove set forth, before distribution is made to them as provided in said subdivisions, then, and in all such events, the amount herein provided for each such beneficiary dying before said distribution shall lapse and become and be a part of the corpus of my trust estate, and held, administered and paid in accordance with the provisions hereinafter set forth for the rest, residue and remainder of my trust estate, as provided by the 22nd paragraph of the Thirteenth Item of this, my last will and testament.
Subdivision c bequeaths the $15,000 to Benjamin Davidow.
"n. In the event of the death of any of my nephews or nieces, provided for or named in subdivisions b, d, e, f, h, i, j, k, and l, hereinabove set forth, leaving issue surviving, before distribution is made to them as provided in said subdivisions, then the issue of such deceased nephews or nieces are to have the sums hereinbefore provided for their parents, the issue of each deceased nephew or niece to take per stirpes and not per capita. In the event of the death of any of my said nephews or nieces, without leaving issue surviving, or in the event of their issue becoming extinct before said distribution, then the sums hereinbefore provided for them shall lapse and become and be a part of the corpus of my trust estate, and held, administered and paid in accordance with the provisions hereinafter set forth for the rest, residue and remainder of my trust estate, as provided by the 22nd paragraph of the Thirteenth Item of this, my last will and testament."
Also subdivision 25 of Item 13, which reads: "25. The provisions herein made for my brothers, sisters, nephews, nieces and their issue are for their, and each of their, sole and separate use, maintenance and support, and are in no event to be liable for any debts contracted by them, or either of them, and are not to be liable to attachment or assignment, but are solely and exclusively for their, and each of their, sole and individual use, maintenance and support and no part of my estate shall vest in said cestuis que trustent, or either of them, until payments shall have been made to her, or him, as the case may be."
As we understand appellants' argument we are urged to rule that the word "distribution" which appears in subdivisions 20-m and n should be construed in the sense of payment, and therefore the deceased legatees had no vested interest in the legacies because they were killed or died before payment was actually made to them. And this despite the fact that the word distribution ordinarily means award upon an accounting. However, we agree with the learned court below in holding this question sought to be raised is no longer open for consideration in the circumstances of this case for the reason well stated by Judge BRADY in his adjudication which we quote with approval: "On the facts and circumstances as found relative to the claims presented by the next of kin and heirs of the deceased legatees, the rights of the claimants rest primarily on whether the rule of res adjudicata should apply. The questions in and interpretation of the provisions of the will covering contingent legacies stand only if the rule of res adjudicata falls.
"The legacies in question were matters determined in the decree of distribution following the adjudication of the second partial account of the trustees. 'A decree of distribution following the adjudication of a partial account is a final decree, and the matters determined in that proceeding cannot again be drawn into controversy between the parties and privies to the decision in a distribution upon a subsequent account, but, by "matters determined" is to be understood such facts and circumstances found or presumed, which fix and determine the rule of law applicable to the case.' Kellerman's Estate, 242 Pa. 3-11.
"No interested party beneficiary questioned the intention of the trustees when on the audit of their second partial account, they requested distribution and award of the legacies to the foreign legatees, and in compliance with their request the adjudication was made. No exception was taken, nor was exception taken to the adjudication on the third partial account of the trustees entered September 25, 1945, confirmed finally October 10, 1945, wherein it was found:
" '9. Award has been made to all specific bequests mentioned in the will and the trust funds therein provided for have been set up as will appear by former adjudications in this estate and the account now being audited.' The balance appearing in the adjudication of the third partial account, which was awarded back to the trustees for further administration comprised the residue of the trust estate. The legacies had been previously awarded to the foreign legatees and impounded under the provisions of the adjudication of the second partial account of the trustees, dated March 18, 1941, and confirmed finally March 31, 1941.
"Despite the two adjudications to which no exceptions were filed nor appeal taken the residuary beneficiaries now reverse their position ( Schroeder Est., 352 Pa. 172) and the trustees in whose custody the legacies were impounded would, if sanctioned, recapture the legacies from the hands now dead for the benefit of the residuary beneficiaries and change the devolution of property, thus frustrating the intent of the testator, Myer Davidow. The effect and the finality of the distribution and award on the adjudication of the second partial account of the trustees cannot be disregarded.
"Should payment be directed to the estates of the foreign legatees? 'The law is essentially pragmatic; it is concerned primarily with the objective to be attained, and it should not be construed as to require the retracing of one procedural road merely in order to pursue another more conventional one to the same legal terminus.' Plogstert Estate, 350 Pa. 474-477.
"The world conditions and particularly the stark realities reflected from the facts and circumstances in the matter before us, are compelling reasons and cause to direct payment to the claimants subject to Executive Orders or Departmental Regulations of the United States Government."
There is little that need be added to what Judge BRADY has so well stated except to say the cases cited by the appellants' learned counsel in their brief are all cases in which no distributions were actually made in the prior adjudications. They are cases where funds were either reserved or awarded back to the accountants for future disposition or accounting. Here the awards were not so made. There was an actual distribution to the legatees then living and entitled. Only because the world conditions made transmission of funds then impossible or impracticable were they awarded back to the accountants, not, however, for future accounting as part of the original trust funds but "impounded for the benefit of the foreign legatees, to be distributed together with the increment that shall accrue thereon . . . to the said legatees when and as directed by the order of Court." Obviously, the accountants then no longer held these awards as trustees of the testator but in reality as trustees of the legatees for whose benefit they were to hold them. The mere fact that the trustees were the same person is a matter of no importance. This does not prevent such an award from being a distribution. See Doster Estate, 346 Pa. 455, 31 A.2d 142 (1943); Hamilton Estate, 351 Pa. 419, 41 A.2d 567 (1945). Judge LEACH might, as was sometimes done during those critical years when legacies could not be safely or legally transmitted to legatees in war torn lands, have awarded them to a different trustee or directed their payment into court as was frequently done to permit the accounting fiduciary to be discharged. The general practice, however, was to do what Judge LEACH did here. But it has never been thought such action would permit a re-examination of the original award at a subsequent accounting; certainly not without a review which here is barred by the 5-year limitation in Sec. 48 of Fiduciaries' Act of 1917, P.L. 447, 20 P.S. 320, 721; Brown's Estate, 343 Pa. 19, 29, 21 A.2d 898 (1941); Elkins's Estate, 325 Pa. 373, 190 A. 650 (1937).
In Bayard's Estate, 340 Pa. 488, 17 A.2d 361 (1941) there had been no distribution of principal in the previous accountings.
We come to this conclusion with less regret because a reading of the entire will makes clear that this testator intended his blood relatives to be the primary objects of his bounty and that his charitable legatees were intended to have only what ultimately remained.
Decree affirmed, costs to be paid by the appellants.