449 Pa. 505 | Pa. | 1972
Opinion by
This is an appeal from a final decree of the Orphans’ Court Division of the Court of Common Pleas of Montgomery County which held that present testamentary life estates were valid, that consideration of the validity of future remainder interests under the Rule Against Perpetuities was premature, that the infectious invalidity doctrine was inapplicable and that, if the appellant life tenant had a valid remainder interest, the existence of a spendthrift clause prevented the remainder interest from merging with his life estate.
Paul A. Davis, Jr. (decedent) died testate on May 7, 1914, leaving his residuary estate to Girard Bank (then Girard Trust Company) in trust to pay the net income to his children in equal shares for their respective lives. Decedent further gave each child a general testamentary power to appoint the portion of principal from which that child’s income was paid but provided that, if the child did not exercise the power, there was an absolute gift over to that child’s issue.
Paul A. Davis, Jr., was survived by four children, one of whom, Duy Davis, Sr. (testator), died testate on January 1, 1942, survived by his wife, Anna B. Davis, and by his son, Duy Davis, Jr. Testator exercised his power of appointment under his father’s will by bequeathing all his property to the Girard Bank in trust, providing for a life estate for his wife, Anna. He further directed that, upon his wife’s death, five separate trusts were to be created: four trusts each
Following the death of Anna B. Davis in 1970, the account of Girard Bank, trustee under the Will of Duy Davis, Sr., was called for audit before the Orphans’ Court Division of the Court of Common Pleas of Montgomery County. Duy Davis, Jr., appeared at the audit and claimed the entire trust corpus or that portion which supported his life estate. The lower court rejected Duy Davis, Jr.’s claims and awarded the trust corpus to Girard Bank as trustee to continue the trust in accordance with its terms.
Duy Davis, Jr. (appellant) makes two arguments attacking the lower court’s distribution of his father’s estate. Initially, he contends that he is entitled to his father’s entire estate, arguing that the future remainder interests following the life estates violate the Rule Against Perpetuities and that the prior life estates
The classic statement of the common law Rule Against Perpetuities is set forth in Gray, The Rule Against Perpetuities, §201 (4th ed. 1942) : “No interest is good unless it must vest, if at all, not later than twenty-one years after some life in being at the creation of the interest.”
In Yewdall’s Estate, 343 Pa. 478, 482, 23 A. 2d 460, 462 (1942), the Court formulated an even stronger standard by saying, “. . . prior limitations are not to be considered as disturbed by reason of the invalidity of ultimate ones in the absence of clear evidence in the will that the testator would have intended otherwise. . . .” There is no evidence at all in the will that the testator intended the prior life estates be struck down if the subsequent interests were declared invalid.
Appellant argues that the invalidity of Walsh’s future interest frustrates the testator’s intent to punish appellant, for marrying a woman of whom testator did not approve, by insuring a disposition of the principal to strangers and that the life estates for the other trust beneficiaries were incidental to this purpose. The life estates have a vitality of their own in the testator’s testamentary plan. The designated life tenants were logical objects of his beneficence, and not merely conduits through which he could postpone the ultimate distribution of his estate. The testator’s intent was to give his son a life income from approximately one-half
The cases upon which appellant-son relies are distinguishable. In the most recent case, Edwards Estate, 407 Pa. 512, 180 A. 2d 590 (1962), an iMtial life estate was followed by successive life estates to thirteen named beneficiaries, their children and their grandcMldren, with the corpus eventually distributable to the great-grandchildren of the named beneficiaries. We struck down the life estates and held that the testator’s dominant intent was to tie up the principal for a period beyond that permitted by the Rule; here there was an expressed intent by the donee that the principal be distributed no later than at the deaths of Havens and Walsh. In Edwards Estate, both the ultimate remainders and the life estates for the grandchildren of the named beneficiaries violated the Rule; here all the life estates are valid and only Walsh’s, not Havens’, general testamentary power of appointment is invalid. In Feeney’s Estate, 293 Pa. 273, 142 Atl. 284 (1928), the testator divided his estate among his seven children. Six of them received one-seventh each free of trust wMle the seventh cMld, testator’s son, received the remaining one-seventh of the estate in trust for life and then to his children for their lives. On the death of a child of the son, the child’s share was to pass to the other six children of the testator (the deceased cMld’s aunts and uncles). The Court held that the ultimate
Appellant-son also contends that, even if the life estates are valid, he has a claim to approximately one-half the principal. His reasoning is that the shift upon his death of the principal supporting his life estate to the trusts for Havens and Walsh is invalid under the Eule and, therefore he has a vested interest in the principal which supports his life estate under the will of his grandfather (decedent), which will merge with his life estate, giving him an estate in fee.
Generally, we will not consider the validity of ultimate limitations under the Eule until any valid precedent estates have expired, provided that the precedent estates will not be affected by the invalidity of the subsequent ones. Laucks Estate, 358 Pa. 369, 371, 57 A. 2d 855, 858 (1918). The present life estate of the son would be affected by any invalidity of the future interests if the life estate could merge with any interest the son may have in the principal as a result of the invalidity. We agree with the lower court that, even if the son has a vested remainder in the principal, the spendthrift provision prevents the life estate from merging with the remainder. Appellant-son is arguing, in essence, that as to him the trust should be terminated. A trust cannot be terminated if it would frustrate the testator’s purpose in creating the trust. Hays’s Estate, 288 Pa. 348, 135 Atl. 626 (1927); Moser’s Estate, 270 Pa. 217, 113 Atl. 199 (1921); Ewalt v. Davenhill, 257 Pa. 385, 101 Atl. 756 (1917); IV Scott on Trusts, §337.2 (3d ed. 1967). Here the testator’s obvious pur
We are not persuaded by the appellant-son’s contention that the spendthrift rule is not applicable because the interests to be merged are both equitable. In rejecting this argument, we need not decide whether the son’s interest in the principal, if the future interests violate the Eule, is an equitable interest. This Court has stated categorically that “a life estate under a spendthrift trust will not coalesce or merge with an estate in remainder.” Bosler Estate, 378 Pa. 333, 336, 107 A. 2d 443, 444 (1954), citing Moser’s Estate. The general rule is that merger can only take place where the interests vesting in the same person are of the same character; either both legal or both equitable. Dickson Estate, 378 Pa. 48, 105 A. 2d 156 (1954). This does not mean that merger is mandatory when the interests are either both legal or both equitable even though the creation of one of the estates requires that it should remain distinct. Where the purpose of the trust requires the trust’s continuance, we cannot terminate the trust by allowing merger. This applies regardless of whether the life beneficiary of a spendthrift trust acquires an equitable or legal remainder. IV Scott on Trusts, §337.2 (3d ed. 1967). Since there would be no merger of the son’s life estate with any interest he would receive by a determination that the future interests violated the Eule, we need not subject the testator’s exercise of his general testamentary power of appointment to the Eule at this time.
Decree affirmed. Costs on appellant.
This appeal is concerned principally with that portion of decedent’s estate which he gave to his son, Duy Davis.
Because both decedent and testator died before 1948, the Act of April 24, 1947, P. L. 100, §4, 20 P.S. §301.4, which makes actualities at the end of the period rather than possibilities at the creation of the interest govern, is inapplicable. The statute applies only to trusts created after its effective date of January 1, 1948. Id. §21, 20 P.S. §301.21; Edwards Estate, 407 Pa. 512, 180 A. 2d 590 (1962).
Walsh, not a life in being, conceivably might have the opportunity to appoint the entire corpus beyond the permissible period of the Rule if he outlived the other beneficiaries of the testator’s trusts.
Thirteen twenty-fourths, since one-third of Effie Ford’s one-eighth share is added to his one-half share.