Opinion
September 24, 1973.
November 26, 1973.
Trusts and Trustees — Provision for payment of specified annual sum to wife and daughter, with discretion in trustees to increase such payments if they believe that necessary or advisable — Bequest of income to third persons after death of wife — Right of daughter to increased payments after mother's death — Construction of will — Avoiding an unnatural or absurd result.
1. In this case, in which it appeared that testator provided that the trustees of a testamentary residuary trust pay the sum of $5,000 per year out of income and principal to his widow, during her lifetime, and in addition, testator gave the trustees the discretion to spend so much of the income and/or principal of the trust estate, for any purpose which the trustees believed advisable for the best interests of testator's widow; that testator further provided that the trustees should pay the sum of $2400 per year out of income, and principal if necessary, to his daughter, during her lifetime, and that the trustees might, at their discretion, increase such payments that they believe necessary or advisable for the maintenance, comfort and support of the daughter and her children, if any, and to expend so much of the income and/or principal of the trust as they should believe necessary or advisable to meet any emergency or unusual condition confronting the daughter, or for any purpose which the trustees believe advisable for her best interests; and that testator also provided that, upon the death of his wife, the income from his trust estate in excess of $2400 per year, if any, should be paid to the appellants; it was Held that the testator's widow and his only daughter were the primary objects of his bounty, that after the death of the mother the income of decedent's daughter was not limited to the $2400 per year, and that after the mother's death the daughter was entitled to payments in excess of $2400, if in the discretion of the trustees she needed such payments.
2. In interpreting a will, construction of the will which leads to an unnatural or absurd result should be avoided.
Orphans' Court — Practice — Approval of trustees' account without evidentiary hearing — Failure to file objections to account before confirmation — Due process.
3. Appellants' contention, that the court violated their rights to due process by approving the account without an evidentiary hearing, was Held to be without merit, where it appeared that appellants failed to file exceptions to the trustees' account prior to its confirmation by the court.
Argued September 24, 1973. Before JONES, C. J., EAGEN, O'BRIEN, ROBERTS, POMEROY, NIX and MANDERINO, JJ.
Appeal, No. 154, March T., 1973, from decree of Court of Common Pleas, Orphans' Court Division, of Allegheny County, No. 1401 of 1949, in re estate of John P. Gangwisch. Decree affirmed.
Third and partial account of sole surviving trustee with petition for distribution. Petition for determination of income distribution by decedent's daughter. Before BOYLE, P. J.
Opinion and decree filed confirming the account and finding that continued distribution to decedent's daughter over the mandated sum lies in the discretion of the trustee. Exceptions thereto by residuary legatees dismissed and final decree entered. Exceptants appealed.
Robert G. Sable, with him Baskin, Boreman, Wilner, Sachs, Gondleman Craig, for appellants.
Eugene B. Strassburger, III, with him Charles F. McKenna, and Strassburger McKenna, for Virginia Hofman, appellee.
Samuel Y. Stroh, with him Frank W. Jones, for Pittsburgh National Bank, appellee.
Appellants herein are the income and residuary legatees of the trust estate of the decedent, John P. Gangwisch. They took exception to the decree of the auditing judge of the Court of Common Pleas, Orphans' Court Division, of Allegheny Couty, which decree was entered on January 30, 1973. Their appeal involves the interpretation of Paragraph Third of the will of John P. Gangwisch, in which he established a residuary trust.
In Subparagraph (a) of Paragraph Third, the testator provided that the trustees pay the sum of $5,000 per year out of income and principal to the testator's widow, Frances Helen Gangwisch, during her lifetime, and in addition, the testator gave the trustees the discretion to spend so much of the income and/or principal of the trustee estate, for any purpose which the trustees believed advisable for the best interests of testator's widow.
In Subparagraph (b) of Paragraph Third, testator provided as follows: ". . . The Trustees shall pay the sum of TWENTY-FOUR HUNDRED DOLLARS ($2400.00) per year out of income, and principal if necessary, in monthly installments, to my daughter VIRGINIA G. HOFMANN, during her lifetime, and may, at their discretion, increase such annual or monthly payments if they believe it necessary or advisable for the maintenance, comfort and support of my said daughter, and her children, if any. In addition, the Trustees may expend so much of the income and/or principal of the trust estate as they shall believe necessary or advisable to meet any emergency or unusual condition confronting my said daughter, or for any purpose which the Trustees shall believe advisable for the best interests of my said daughter. PROVIDED, HOWEVER, that the payments of any increased amounts over and above TWENTY-FOUR HUNDRED DOLLARS ($2400.00) per year shall be made only after due investigation by and satisfaction of my said Trustees that the same is necessary or advisable, and that it will not in any way jeopardize the amount payable to my wife, FRANCES HELEN GANGWISCH, as aforesaid."
In Subparagraph (d) of Paragraph Third, the testator provided that upon the death of his wife, "the income from my trust estate in excess of TWENTY-FOUR HUNDRED DOLLARS ($2400.00) per year, if any, shall be paid to [the appellants] in the same proportions that the principal of my trust estate is to be distributed upon termination, as hereinafter provided."
Appellants contend that all of the discretion given the trustees in Subparagraph (b) to increase the income of Virginia G. Hofmann, testator's daughter, above $2400 per year out of income and/or principal is completely eliminated by the provisions of Subparagraph (d), so that after the death of her mother, on September 22, 1971, the income of decedent's daughter was strictly limited to $2400 per year and no more. The court refused to accept appellants' construction of the above-quoted provisions of the Gangwisch will. According to the court, appellants' contention was "altogether illogical and contrary to human experience." We agree with the Orphans' Court.
In interpreting a will, construction of the will which leads to an unnatural or absurd result should be avoided. Fahey Estate, 360 Pa. 497, 61 A.2d 880 (1948). Here, the testator has clearly provided that the trustees could pay his daughter, during the lifetime of his widow, amounts in excess of $2400, if she needed such payments. It would make no sense to say that after her mother's death, Virginia G. Hofmann was no longer entitled to such increased payments, particularly since the $5,000 basic payment which had been earmarked for the testator's widow was now available. Appellants contend that they are the ultimate objects of the testator's bounty and that the construction that they have chosen should, therefore, be selected. See Crozer's Estate, 336 Pa. 266, 9 A.2d 535 (1939), and Opperman's Estate (No. 1), 319 Pa. 455, 179 A. 729 (1935). While they may be the ultimate beneficiaries (in the sense that, ultimately, they will inherit whatever is left of the remainder of the trust), they were not the primary beneficiaries. The organization of Paragraph Third of the Testator's will indicates that it was his widow and his only daughter, Virginia G. HOFMANN, who were the primary objects of his bounty. The testator made clear that these beneficiaries, although they were only life tenants, were entitled to as much principal as they needed in addition to the income from the trust. Consequently, there was no need to repeat in Subparagraph (d) the same discretionary language contained in Subparagraph (b). See discussion of elliptical expression in Lippincott's Estate, 276 Pa. 283, 288, 120 A. 136 (1923).
Appellants also suggest that the court violated their rights to due process by directing income distribution and approving the third and partial account without an evidentiary hearing. We see no error since appellants failed to file objections to the trustees' account prior to its confirmation by the court.
Decree affirmed. Costs on appellants.