Eberly's Appeal

| Pa. | Oct 5, 1885

Mr. Justice Sterrett

delivered the opinion of the court, October 5th, 1885.

It is unnecessary to consider the broad question which has been so ably discussed by the learned counsel for appellant, viz: Whether the 9th section of the Act of April 18th, 1853, Purd. 1245, pi. 9, was intended in any way to affect what are sometimes classed as “ spendthrift trusts.” The language of the Act is very comprehensive, and while it is perhaps to be regretted that it is so sweeping in its terms, we are constrained to adhere to the construction that has heretofore been given to it in Washington’s Estate, 25 P. F. S., 102; Stille’s Appeal, 4 W. N. C., 42; McKee’s Appeal, 15 Norris, 277; Carson's Appeal, 3 Out., 325, and other cases. In Washington’s Estate, 8 Phila., 182, our brother Paxson said, “It is difficult to see the wisdom of any Act which requires, in a large estate, the accumulated income of a minor to be paid to him upon his arrival at full age. There are many instances where such a thing would be injurious to him in the highest degree:” and in Carson’s Appeal, supra, our brother Tkunkey referring to the language above quoted remarks: “Time enough has elapsed for legislative correction, if the intendment of the statute has been misapprehended by the courts......We are not convinced that the repeated ymd uniform decisions upon the very question now presented should be overruled. Stare decisis.”

The former rule against perpetuities applied to income as well as corpus. As to the latter, the Act of 1858 makes no change; but with respect to the former, it introduced a more stringent rule and declares that a direction to accumulate, longer than the time specified therein, shall be void, &c. The proviso to the section specifically exempts from its operation every “donation, bequest or devise for any literary, scientific, charitable or religious purpose.” All others are embraced whenever they offend against its provisions in regard to accumulations. It is not essential that the direction to accumulate should be express. If the estate is disposed of so or in such manner that accumulations, clearly beyond what may be reasonably required to fully and effectually carry out the provisions of the trust, must necessarily exist, it amounts to an implied direction to accumulate. But, in determining whether the excess of income over and above disbursements and expenses, at any given time, is an accumulation within the prohibition of the statute or not, regard must be had to the trust property and the duties imposed on the trustee. If, as in this case, the trust is an active and continuing one, involving principally the management of real estate, keeping the same in repair, etc., as the. trustee “would his own property,” and paying out of the proceeds thereof an annuity and other fixed charges as well as uncertain and contingent outlays and expenses, care must be taken not to strip the trustee of a contingent fund upon which he may be required to draw to meet the exigencies of the trust. In this case the so called accumulations upon which the improvident cestui que trust is so anxious to lay his hands, amount to about $5,000, a sum that, for aught we know, would not be more than sufficient to replace the buildings on the farm in case they should be destroyed. The failure or destruction of crops, even.for a single year, might so lessen the income as to necessitate the use of part of the balance on hand to pay the annuity and meet other pressing demands on the trustee. The corpus of the trust is unlike that composed of cash or good interest-bearing securities, yielding a comparatively certain and uniform income. In McKee’s Appeal, supra, no question arose, nor could any possibly arise, in regard to the admitted accumulation. There was no contingency in which it could be required for the purposes of the trust other than to swell the already large accumulated balance, which the testator did not appear to have anticipated or provided for.

In the case before us, the testator appears to have foreboded the thriftless and improvident character of his only son, and that doubtless prompted him to create the trust found in his will. After making minor dispositions of part of his property, he gave all the rest, residue and remainder, real and personal, to appellant “in trust to make such investment and manage the same as he would his own property, and out of the same to pay the annuity allowed my mother; to keep up the repairs of my homestead, to provide for the maintenance and education of my son John R. Albright during his minority, ..... and upon my son’s arriving at twenty-one years of age to pay him the sum of $500 arid a like sum annually until he arrives at the age of twenty-five years. Upon the arrival of my son at the full age of twenty-five years, if in the judgment of my trustee or upon due proof and order of the Orphans’ Court of Cumberland county it shall appear that he is a sober and well doing man, competent to take care and manage his estate, then I direct my trustee to convey my real estate to my said son John R. Albright in fee simple, and turn over to him the personal estate remaining in his hands.” When the time comes for the court to pass upon the question, it is not likely, in view of the evidence before us, that they will feel warranted in adjudging appellee a fit person to take charge of his estate. If lie is not, the testator directs that he shall receive annually $500 during life, and at his death all the real and personal estate in the hands of the trustee is given and devised by testator to the heirs of his son in equal shares.

We think the Orphans’ Court erred in deciding that the fund in the hands of the appellant is accumulated income within the prohibition of the statute.

Decree reversed and petition dismissed and it is ordered that the appellee pay the costs, including costs of the appeal.