31 A.2d 147 | Pa. | 1943
The single question raised by this appeal is whether the learned auditing judge has correctly allocated principal and income in a trust estate.
Testator died in 1926, and by his Will created a trust to pay income to his widow, children and grandchildren. See Crozer etal. v. Green,
It appears in the statement of the case that certain portions of the real estate which have heretofore been sold, and certain other portions which are retained, were derived by the trustees from foreclosure of mortgages. Other real estate is what has been designated as "decedent owned". Since 1927 an income deficit of $197,786.18 has accumulated, because of the carrying charges on various pieces of unimproved real estate. The learned auditing judge, considering the life tenants entitled to relief, "re-allocated" from principal to income the proceeds from the sale of a portion of real estate acquired on foreclosure, appearing as principal in the supplemental account for 1937 and 1938. They total $7,000. Proceeds, totalling $1,874.25 from the sale of a piece of decedent-owned real estate allocated to principal in the same supplemental account, were similarly "re-allocated" to income. The auditing judge also directed that proceeds of $1,998. from the sale of another decedent-owned property appearing in the fourth account, should be re-allocated from principal to income. These items, totalling $10,872.25 were ordered to be paid to the life tenants. The reason assigned was that the proceeds were received "within the five-year period within which an adjudication may be reconsidered". All of the prior adjudications had been confirmed absolutely, and no petitions for review were granted. Furthermore, the auditing judge appears to have concluded, if we understand the record correctly, that fifty percent of all future sales of real estate should be allocated to income until the overdraft be reduced by one-half. It does not appear in the record before us how that conclusion was reached or by what it is supported. *449
We cannot sustain the decree confirming the adjudication. At the outset, it is clear that an account confirmed absolutely may not be disturbed, even within five years, except by a petition for review: Fiduciaries Act of 1917, P. L. 447, Section 48, 20 PS 843; Osterling's Estate,
It is true that if upon the re-audit of the accounts now before us, it becomes necessary to invade principal in aid of income, the particular proceeds from the sale of real estate in question could be used for such purpose, as could any other principal in the trust estate. But that is quite a different thing from re-allocating, without review, principal and income in prior accounts, the confirmations of which have become absolute.
Our principal objection to the decree of the court below, however, relates to substance and not merely to procedure. Because some of the real estate was obtained through foreclosure, the sale thereof involves a salvage operation.Nirdlinger's Estate No. 2,
It must also be said that if the court's decree was intended directly or indirectly now to define the allocation of the proceeds of real estate to be followed in future accounting, it is open to the objection that future accounts are not now before the court, and therefore, not now subject to final disposition in the respect intended.
The decree is reversed, and the record is remitted to the Orphans' Court for such further proceedings, in accordance with this opinion, as the court may deem proper. Costs to be paid out of the principal of the estate.