154 A. 814 | Pa. | 1931
This appeal is by a remainderman from the refusal of the court below to grant a petition for the review of an order which was previously made in this estate, awarding stock dividends to the life tenant. Granting or refusing to grant a petition for review of a former proceeding, order, or decree, is a matter within the sound discretion of the court below (Bailey's Est.,
"The account was called for audit June 25, 1928, and a further hearing had October 19, 1928. Voluminous depositions were taken and admitted in evidence. The records of the company referred to in the petition were just as available to the petitioner then as they were at the presentation of this petition, or are now, and the evidence proposed to be offered is of the same character as that which was admitted and considered by the court. It is not in the nature of after-discovered evidence. We are of the opinion, therefore, that the petition should be dismissed."
Distribution of extraordinary dividends between a life tenant and remainderman shall be made so as to preserve the intact value of the estate: Flaccus's Est., *446
Appellant claims that five items which were principal accretions attributable to capital were used as a basis for the stock dividend by the Richmond, Fredericksburg Potomac Railroad, and that any dividend received by the trustee, having such items as a basis, should have been awarded to the corpus for the remainderman. The five items were as follows: first, an increase of capital assets over capital charges, reflected in a surplus account arising through a merger; second, profits from the sale of property accruing after the death of testator; third, a reserve fund set apart from earnings and income under the recapture clause of the Act of Congress of February 28, 1920, paragraphs 6 and 7, known as the Transportation Act; fourth, a sum received from the government on account of deficiencies in material and supplies when railroads were turned back to the owners after the war; and, fifth, the amount necessary for the company to spend to restore the physical condition of the railroad to what it should have been when government control ended, which sum was afterwards paid to the company by the government.
Appellant relies on Dickinson's Est.,
In instances like the merger of the Richmond, Fredericksburg Potomac Railroad with the Washington Southern Railway Co., it is sometimes difficult to determine whether the given item should be treated as principal accretions or as profits. As a result of the merger, the former railroad acquired $5,800,000 of assets against which was issued $4,000,000 of stock as a capital charge; the balance, being an earned surplus on the books of the Southern, was transferred to a like account in the consolidated company, the Richmond, Fredericksburg Potomac Railroad. The effect of a merger was a coalescence of physical properties, accounts and all assets: Lauman v. Lebanon Valley R. R. Co.,
On the other items of so-called principal accretions mentioned above, it may be stated that where earnings are produced from the entire capital or part of it and invested in capital assets, any stock dividends declared thereon will be treated as income and be divided between the life tenant and remainderman so as to preserve the intact value of the stock. Appellant argues that no profits made by a railroad company during the period of a trust can be considered as enuring to the benefit of a life tenant except earnings from the operations of the railroad. With this we cannot agree. On the contrary, profits derived from miscellaneous sources are always included in the profits of the road, and dividends, both cash and stock, may be paid out of them. Such profits, realized since the testator's death, are fairly attributable to earned surplus.
Stress is laid on Graham's Est.,
So far as appellant's last three contentions are concerned, we need only point out the fact that after giving effect to the stock dividend the amount remaining in the earned surplus account was considerably in excess of the total involved in appellant's objections. These questions are therefore academic.
The court below did not abuse its discretion in refusing the petition.
The decree of the court below is affirmed at appellant's cost.