132 A. 822 | Pa. | 1926
George W. Kipp died in 1911, leaving a will in which, after making certain specific devises, he provided, in section five, that his executors and trustees should set aside $10,000 for each of his grandchildren, the income to be used, as necessary, for their care and education, the balance to be paid to them upon reaching majority. In paragraph six, he directed the "executors and trustees to invest the rest, residue and remainder of [his estate] in such ways as may be consistent with safety, to collect promptly the interest or dividends therefrom, and to pay the income or profits thereof to [his wife], Martha A. Kipp, in such amounts, and at such times as she may direct, during the term of her natural life." *93
After the decease of the wife, which has now occurred, the income, and, subsequently, the principal, were made payable to seven grandchildren in equal shares. Later, the Scranton Trust Company was appointed guardian of all the minors. The trustees insisted that the proper interpretation of the will required the retention by them of the fund first provided for, and above referred to, as well as the residuary estate, for the purpose of supporting and caring for the minors designated. To the appointment of the Scranton Trust Company, as guardian for them, no objection seems to have been raised by anyone in interest. It is now insisted that the court was without jurisdiction to make such designation, but as no appeal was taken from the original order (Phillips's Est.,
The trustees, claiming the right to control both funds created for the ultimate benefit of the grandchildren, filed an account, and to it many exceptions were interposed. These were finally disposed of by the learned court below, and, on appeal, the decree entered was affirmed: Kipp's Est.,
After the affirmance of the decree referred to, a petition was presented by the Scranton Trust Company, guardian of four of the grandchildren, asking for a *94 citation directing the trustees to pay over the balances found to be due to the respective wards, who joined in the application. It may be noted that the three other beneficiaries, for which similar provision had been made by the testator, had either been paid in full, or received advances, but, in the present proceeding, four minors alone are interested. An answer was filed by the trustees, setting up that the entire estate, under the terms of the will, was to be held by them for the benefit of the grandchildren, so that proper support, maintenance and education could be furnished, and averring that it was for this reason that the balances, determined to be payable to the respective wards, had not been turned over. It was their contention, and apparently honest belief, that the entire funds, referred to in paragraphs five and six of the will, were to be used for this purpose. A replication was filed, and, on the pleadings alone, a decree was entered by the learned court below directing the delivery, of the sum shown by the account, to the guardian of each. From this order an appeal has been taken by Fell and Hawes, the two trustees.
The single question raised is as to the extent of the power conferred upon appellants by the Kipp will. Undoubtedly, the special fund, provided by paragraph five, must remain in their hands, and this is conceded by the Scranton Trust Company, guardian. However, as to the balance directed to be distributed under paragraph six, it is insisted that the trustees have no control thereof, but that the same should be paid to the appointed representative of the grandchildren. It is undoubtedly true that, where authority has been lodged by testator in certain individuals to receive and invest moneys and to perform active duties in the distribution of the same, the funds must remain in their hands until the time fixed for the termination of the trust: Partridge's Est.,
A cross-appeal has been filed by the guardian, based upon the failure of the court below to allow interest on the balance found due after some five years of litigation, the result of exceptions filed on behalf of the grandchildren, and finally dismissed, the order being subsequently affirmed by this court. It will first be observed that this case was heard on the pleadings, the petition, answer and replication. No testimony was taken to show any improper conduct or neglect in the making of investments by the trustees. On the contrary, it was found that they acted with the utmost diligence. In the absence of some proof of failure on their part to perform their duties, the order of the court below, declining to allow interest, should be sustained. It is true that such charge will be made against a fiduciary who fails to invest within a reasonable time, when he has opportunity to do so, if there is no necessity for retaining in his hands funds for the use of the cestui que trust (Stearly's App.,
It is further to be remembered that the orphans' court in the present case determined, after an examination of all the facts, that an allowance of interest would be unjust. The Act of March 29, 1832 (section 18, P. L. 190), provides, "The amount of interest to be paid in all cases by executors, administrators and guardians shall be determined by the orphans' court under all the circumstances in the case, but shall not in any instance exceed the legal rate of interest for the time being." This was a new section, as appears by the record of the *97
commissioners who drafted the act in 1830, and was intended to give discretion to the orphans' court as to whether such charge should or should not be made, and, if so, at what rate, depending upon the facts of each particular proceeding. In 1917, the section was reënacted, substituting only the word "fiduciaries" for "executors, administrators and guardians," a change which merely clarified the evident intention: Fiduciaries Act of 1917, P. L. 442, section 44(b). Here, the court below, after consideration of the entire matter, was of the opinion that injustice would be worked if interest was allowed, and, therefore, refused to make such order. It was a matter largely within its discretion (Elton's Est.,
The order and decree of the orphans' court is affirmed, and the appeals entered to No. 40, January Term, 1926, and No. 63, January Term, 1926, are dismissed; costs of both appeals to be paid in equal parts from the distributive shares of the minors.