Packer's Estate

246 Pa. 97 | Pa. | 1914

Opinion of

Mr. Justice Moschzisker,

The question here involved is /‘Did the trusts under the testator’s will cease upon the death, October 29,1912, of Mary Packer Cummings, the last survivor of the three children named in his will, or, as contended by the appellants, do they continue for twenty-one years from said date?”

Asa Packer died May 17, 1879, leaving a will and codicil, which were duly probated; he designated five executors, to whom he devised all his property in trust, as is more particularly shown in the abstract of the will to be found in the reporter’s notes published in connection with this opinion. The testator left to survive him a widow, who died intestate, November 17, 1882, and three children, Robert A. Packer, who died February 20, 1883, Harry E. Packer, who died February 1, 1884, and Mary Packer Cummings, who died October 29, 1912; all testate and without issue.

Shortly after the death of Mrs. Cummings, Asa Packer’s trustees filed an account embracing his residuary estate, and at the adjudication of this account, the auditing judge construed the will as showing two dominant thoughts, (1) To keep under the control of the trustees designated by the testator and their successors, all his stock and other securities of the Lehigh Valley Railroad Company and its affiliated corporations, for as long a period (within the limits of the law) as in their judgment might seem best; (2) To keep a large portion of his property in trust for the benefit of the three children named by him, and their descendants, as long as permitted by law. The trustees were given the right, however, in their discretion, to dispose of the testator’s Le-high Valley Railroad holdings; and this they did before the decease of Mrs. Cummings. They were also empowered to pay to the authorities of the Lehigh University and the St. Luke’s Hospital of Bethlehem, funds, considerable in amount, invested in Lehigh Valley securities, held in trust for those institutions; which privilege they likewise exercised prior to the death of Mrs. Cummings. The court below concluded that since testator’s three children had died without issue (each disposing by will of the proportion of the estate of their father, principal and income, over which he or she had the right of appointment), and since the university and hospital had obtained actual possession of the sums devised to them, and the interests of the Lehigh Valley Railroad had been severed from the estate, the purposes the testator had in mind when he created the trust were accomplished, and therefore, no sufficient or valid reason existed for continuing it.

In an elaborate opinion sustaining the conclusion that the trust had terminated, Judge Anderson, speaking, for the Orphans’ Court in banc, so well states the views of that tribunal, that we cannot do better than to quote liberally therefrom. It is there said: “The law of Pennsylvania, following the law of England, prescribes a time limit to the power of a testator to tie up his estate; and that is during the period of a life or lives in being and twenty-one years thereafter; and it is clear that, when the testator sat down with his scrivener to. create the trusts under the will in controversy, that time was fixed in their minds as the limit beyond which they could not go; for we read in the thirty-first item of this will that this trust shall terminate twenty-one years after the death of the last survivor of his children. A trust, however, whether limited to a life or for years, will not be upheld if its purpose fail before the expiration of the life or term of years. This is well illustrated by........ Kuntzleman’s Est., 136 Pa. 142; Lee’s Est., 207 Pa. 218; Koenig’s App., 57 Pa. 352;......Woodburn’s Est., 151 Pa. 586; Coover’s App., 74 Pa. 143; McMullin v. McMullin, 8 Watts 236; Brubaker’s App., 65 Pa. 317; Bea v. Trust Company, 17 Philadelphia 357; Snyder’s Est., 17 Pa. D. R. 270. (Also see, Yarnall’s App., 70 Pa. 335, 339.) Of course, where the testator in unequivocal language provides for a definite term, and the purpose of the trust is not unlawful, as in Biddle’s App., 99 Pa. 525, Derbyshire’s Est., 239 Pa. 389, in which it was evidently the intention of the testator to fix a time during which a fund might accumulate for the benefit of a charity (accumulation for that purpose not being within the inhibition of the act), the trust will be upheld during the whole period named by the testator. The principal contention in the present case is as to whether the trust created by the will of Asa Packer falls into the one or the other of these two classes; it being argued on the one hand that its purpose has been accomplished, and on the other that the testator has indicated a time within the lawful period during which it should continue. It is a fundamental proposition in construing wills that the testator’s intention must govern, and that this intention is to be gathered not from any particular words, phrase or paragraph, but from the four corners of the will; and, as has been stated in many cases, the best way of arriving at that intention is to place ourselves in the position of the testator, and from that standpoint read the will,.....: Herman’s Est., 220 Pa. 52. The testator, at the time of the making of this will, was the possessor of a large fortune which had grown with the growth of the Lehigh Valley Railroad and its appurtenances, of which road he was the builder and upon whose success his fortune largely depended; he had a wife, three living children, grandchildren, the children of a deceased daughter, and collateral relatives. He was the founder and benefactor of St. Luke’s Hospital and of Lehigh University......; his wife and children were the natural objects of his bounty, and the success of the institutions named evidently was of great moment to him,......; he was also interested particularly in keeping up the connection between his estate and the Lehigh Valley Railroad. With these objects in mind he wrote his will by which, after providing for various legacies and annuities, he gave the residue of his estate to trustees to pay out of the income to be derived therefrom (after certain provisions for his wife and the university and hospital which have been carried out) certain annuities to each of his children, and the balance to them in equal shares during their respective lives, and upon their deaths the income to their children or issue during the life of the survivor or survivors, together with the principal upon the death of the last survivor of his children; giving, however, to each of his children power to appoint by will one-half of his share of the income during the life of the trust and (at the expiration of the trust) one-half of the principal of the share from which such child derived the income. By the last item, he provided that the trusts under his will should terminate twenty-one years after the death of the last survivor of his three children, and in case there should then be no one descendant of his said three children living, the one-half of the principal of his estate and such portion as had not been disposed of by his said three children should pass in equal shares to the children of his deceased daughter and their issue, to his nephews and nieces mentioned in his will, and to the university and hospital. Testator left surviving three children, Robert A. Packer, Harry E. Packer and Mary Hannah Packer, afterwards Cummings (all of whom died testate, but without issue), and three children of his deceased daughter. Although twenty-one years had just begun to run since the death of testator’s last surviving child, claim was made at. the audit that the trust, having served its purpose, should now be terminated; and the auditing judge so found by his adjudication. He held that the paramount thought of the testator in the creation of the trust was to provide as long as possible (that is as long as permitted by law) an income for his three children and their descendants, with the collateral purpose also of keeping as long as possible the connection between the estate and the Lehigh Valley Railroad, and he found as a fact that the connection between the estate and the railroad had been severed some time ago; this purpose of the trust having been accomplished, and the three children of the testator being deceased, without issue, he declared the trust ended. On exceptions to this finding it was argued......that the purpose of the testator was to keep the estate intact as long as the law allowed, irrespective of the lives of his children or other descendants; and that for this purpose he had given a power of appointment to his children during the whole period of twenty-one years, which power they had exercised, and that the trust therefore could not be terminated without a disregard of<■-the rights of the person who took under their appointment. It is true the testator stated in his will that this trust shall terminate twenty-one years after the death of the last survivor of his three children, but it is also true that he has in his will indicated the purposes for which the trust was created. (In considering this subject, we drop out of consideration the university and hospital, whose trusts were ended by the action of the trustees under the will, and the Lehigh Valley Railroad, the connection of the estate with which terminated by the sale of its securities by the trustees.) In the nineteenth item of his will, in which he speaks of the retention by the trustees of the fund given for the benefit of the Lehigh University, he says that such retention shall continue ‘until the final termination of the trusts created for my children and their children and issue under this will.’ In the twenty-third item he says, ‘I further will, bequeath and direct that the trustees under this will shall, at the time limited for the determination of the trusts under this will for my children and grandchildren and their issue as hereinafter provided for,’ pay over, etc., and in the thirty-first item, ‘The trusts under this will shall terminate twenty-one years after the death of the last survivor of my said three children’; hut nowhere in the will does he in terms direct that it shall continue during that period. It is clear, therefore, that the controlling thought of the testator was not to create a trust simply for the purpose of continuing twenty-one years after the death of the last survivor of his children, but a trust for the purpose of taking care of his children named, their children, issue of descendants, as long as the law would allow. It will be borne in mind that, at the termination of the trust, the testator directed the estate in case of the death of his children without issue to be distributed, one-third to the children of his deceased daughter, one-third to his nephews and nieces mentioned in his will, and the remaining third to the university and hospital. In making the gift to his nephews and nieces mentioned in the will, who-were then living, he shows that he contemplated the possibility of the ending of this trust in their life-time — a possibility not likely to have been within his contemplation had he fixed an inflexible rule that the trust must continue at all events for twenty-one years beyond the life of his children, who presumably were of an age near that of their cousins, his nephews and nieces. (We find it stated as a fact in one of the paper books that, ‘At the time of the probate of the will, all of the nephews and nieces named therein were alive and all of them older than his surviving children; they are all dead now.’) Nor do we think the fact that he gave his children power to appoint half of their income during the period of the trust has any weight in shortening or lengthening that term, as he had also given them power to appoint the principal; his purpose clearly being to give them the right of appointment of both principal and income no matter how long the trust might continue. The purpose of the testator having been accomplished, the university and hospital having obtained their gifts of principal, the interest of the railroad having been severed from the estate, and his three children having died without issue, there is no reason for continuing the trust, and it must therefore be declared terminated.” These views fully vindicate the decision of the learned court below, and but little more need be said in disposing of the present appeal. .

Mrs. Cummings, by her will, devised twenty twenty-thirds of the share of the income of the Packer estate over which she had power of appointment to the Lehigh University, for twenty-one years, and the principal at the expiration of that period; to the appellants (the trustees under her will), she devised the remaining three twenty-thirds of income, in trust for twenty-one years, to support three annuities during that period, and to pay the balance of income not necessary for this purpose to certain charities named by her, the principal to go to these charities at the termination of the trust. The appellants contend that the entire residuary estate of Asa Packer must be. held together for twenty-one years from Mrs. Cummings’ death; so that the provisions of her will may be literally carried out by them. The court below took the position that, while the children of Asa Packer were given certain powers of disposition over principal and income derived from his residuary estate, yet, their control was subject to the terms of his will, saying, “The power of appointment over income was to appoint during the life of the trust; after that the power was to appoint the same proportionate part of the principal....... There is nothing in the will, however, which contemplated the appointment of income beyond the life of the trust, and the mere fact that the appointor......can fix a time limit in her appointment of income cannot prolong the duration of the trust; being entitled to appoint the principal at the termination of the trust, she can provide, as she did, that income only shall be payable during twenty-one years. But this is not a portion of the income of testator’s whole estate, but the income from the definite share of the principal which she was entitled to appoint. The argument, therefore, based upon the line of cases of which Wilen’s App., 105 Pa. 121, and Aubert’s App., 119 Pa. 48, are examples, falls.” This position is undoubtedly sound. As pointed out by the learned court below, the Packer will does not show a fixed intention that, under any and all conditions, the trust should continue for twenty-one years; and when its real purpose was accomplished, under the relevant principles of law, it came to an end. Therefore, it follows that Mrs. Cummings could not keep the trust alive by'a provision in her will, for, as already stated, her power to appoint the income of the Packer estate, as such, was limited to the duration of the trust created by her father.

The Packer will contains no express direction that the trust in question shall continue for twenty-one years, or any other definite time; in fact, this period is only mentioned once, and that is in' the thirty-first article, where the testator directs that the trust “shall terminate twenty-one years after the death of the last surviv- or of my said three children.” When read as a whole, the will strongly suggests that the testator, having in mind the rule against perpetuities and the principle that the possibility of a conflict between it and a testamentary disposition is sufficient entirely to avoid the latter (James Est., 245 Pa. 118), inserted this provision to make sure to keep within the law. He, no doubt, desired to show express recognition of and compliance with the rule in order to avoid the possibility of conflict between it and the trust created for his “children and their children and issue.” In other words, the testator’s dominant purpose was to keep the Lehigh Valley securities under the control of his trustees and to protect his three living children and their issué for as long a time as permitted by law, — not to create a trust for the definite period of twenty-one years. The arguments against this conclusion are not convincing. In answer to those not already touched upon, we may say that, in our view, the •word “then,” , as used in the 31st paragraph of the will, taken in connection with the rest of the instrument, should be read as referring to the “termination” of the trust, whenever that might occur, and not to the end of a fixed and unchangeable period of twenty-one years; again, the provision in the 12th paragraph, that in the event of none of testator’s three children leaving descendants, the mansion-house should “fall back and become part of” his residuary estate, does not of necessity indicate that the trust involving the residuary estate is to be continued for a further period of twenty-one years. On the contrary, it seems to us that this direction merely indicates that, in the event provided for, the mansion-house was to be. treated as any other part of testator’s residuary estate; that is to say, the trustees under his will were to take the property, in question for distribution, not for administration.

The construction adopted by the court below is not only reasonable, and in accord with the applicable principles of law and the relevant rules of interpretation, but it avoids either a partial intestacy as to one-half of the income from the decedent’s residuary estate or an invalid accumulation of such income; one or the other of which would result if the will were construed to mean that the trust under consideration must continue for twenty-one years after the death without issue of the last of the testator’s children (McBride’s Est., 152 Pa. 192; Sidall’s Est., 180 Pa. 127; Lefebvre v. D’Arcy, 236 Pa. 235). There are several appeals in this case; and for that reason we shall leave it to the court below to make a proper order covering the costs. All the points here discussed are raised by the first assignment of error; this assignment is overruled and the others are, dismissed.

The decree is affirmed; the costs to be paid by ,the appellants and others as ordered by the Orphans’ Court when the record is returned to it.

Case Details

Case Name: Packer's Estate

Court Name: Supreme Court of Pennsylvania

Date Published: Jul 1, 1914

Citation: 246 Pa. 97

Docket Number: No. 1; Appeal, No. 101

Court Abbreviation: Pa.