Case ID: pa_278/html/0185-01.html
Source: Caselaw Access Project
Author: {"author": "Me. Justice Sadlbe,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Buch’s Estate.
    
      Trusts and trustees — Active and passive trusts — Termination of trusts — Wills.
    1. Active or special trusts are those in which, either from the express direction of the language creating them, or from their very nature, it is apparent the trustees are charged with the performance of active and substantial duties with respect to the control, management and disposition of the property.
    2. In determining whether a trust created by a will is active or passive, the whole will must be examined to discover the purpose of the testator.
    3. Where a father divides his estate in equal amounts among his children, but directs that his executors shall invest the share of one son “and if he dies without issue, the said share shall be equally divided among his brothers and sisters or their heirs,” the trust is active and the son takes a life estate only, and cannot demand a termination of the trust.
    4. In such case, an agreement by all parties in interest then living that the son should be paid a portion of the principal, and the balance held in trust for the purposes set forth in the will, does not give the son a right to terminate the trust, the remaindermen not being protected.
    Argued May 14, 1923.
    Appeal, No. 280, Jan. T., 1922, by John E. Buch, cestui que trust, from decree of O. C. Lancaster Co., Dec. T., 1915, No. 37, discharging rule to terminate trust, in estate of Jacob S. Buch, deceased.
    Before Walling, Simpson, Kephart, Sadler and Schaffer, JJ.
    Affirmed.
    Eule to terminate trust. Before Smith, P. J.
    The opinion of the Supreme Court states the facts.
    Eule discharged. John E. Buch, cestui que trust, appealed.
    
      Error assigned, was decree, quoting it.
    
      K. L. Shirk, with him John A. Coyle, for appellant.—
    Under the will of Jacob S. Buch no active trust was created: King’s Est., 147 Pa. 410; Shoup’s Est., 31 Pa. Superior Ct. 162; Kunkel v. Kemper, 32 Pa. Superior Ct. 360; Frey’s Est., 25 York 141; Hoffman’s Est., 27 Pa. Dist. R. 6; Curtis Case, 60 Atl. 240; Neal v. Beach, 92 Pa. 221; Audenreid’s Est., 4 Pa. Dist. R. 507; Henderson’s Est., 258 Pa. 510.
    
      Where a trust is dry or passive, it can be terminated on petition of the cestui que trust asking for its termination: Culbertson’s App., 76 Pa. 145; Keyser’s Est., 6 Pa. Dist. R. 181; Harrar’s Est., 244 Pa. 542; Stafford’s Est., 258 Pa. 595.
    No appearance for appellee.
    June 23, 1923:
   Opinion by

Me. Justice Sadlbe,

Jacob S. Buch died in 1915, having left a last will and testament, duly probated, by which two persons were appointed executors and trustees. He was survived by a widow and eight children, and to the latter equal amounts in the estate were given. The fifth clause, however, made separate provision for the part of one unmarried boy, as follows: “I order and direct that my executors shall invest my son John’s share safely at not less than four per cent, interest, and if he dies without issue, the said share shall be equally divided among his brothers and sisters or their heirs.” The executors filed an account, which was adjudicated, and an award made to John’s trustees of one-eighth of the net estate, less $694, the amount of indebtedness. By agreement, dated June 12,1917, of all parties in interest then living, joined in by John, it was provided that he should be paid from the principal remaining $694.88, leaving in the trust account the sum of $2,000 which amount was thereafter invested at the rate of five per cent, and the income paid to him. In 1921, upon petition, a citation was directed to the trustees, asking that they show cause why the sum. in their hands should not be paid over to the beneficiary, it being averred that the trust was passive and therefore executed, and in this request the widow joined, as did one brother and a sister. After hearing, the application was refused. The respondents later resigned, and the Peoples Trust Company of Lancaster was appointed in their place. The only question raised on this appeal is the right to demand a termination of the trust, and compel the payment over of the principal.

The court below held, though the duty imposed by the will was merely to invest, the limitation over in case of death without issue made necessary the conservation of the estate for the benefit of the possible remaindermen. No offer was made by the life tenant to give bond for their protection, as provided by the Act of May 17,1871, P. L. 269, reenacted June 7, 1917, P. L. 447, section 23. If, however, the trust is a dry one, he is entitled to the sum held for his benefit. It is to be. noted the father made provision in his will for the petitioner in a way different from that for his other children. To the latter, he gave absolute estates, but in the case of appellant, there was an attempt to make a distinction and create a fund for the benefit of the cestui que trust, and those who might survive. This was the evident understanding of all concerned, as further appears from the wording of the agreement of June 12, 1917, in which the heirs joined, and in which it was stated in paragraph 1, “that the amount of money to be placed in trust for John Buch shall be $2,000.”

It is undoubtedly true that, if no active duties are imposed, and the holding of thé amount in hand is not required to protect interests of others, the trust Avill be held to be passive, and, upon proper application, the principal will be turned over: Stafford’s Est., 258 Pa. 595. But in considering the effect of such provision in a will, the intention of the donor, and not the desire of the beneficiary, is the primary and controlling consideration. Active or special trusts are those in which, either from the express direction of the language creating them, or from their very nature, it is apparent the trustees are charged with the performance of active and substantial duties with respect to the control, management and disposition of the property: Henderson’s Est., 258 Pa. 510; Simonin’s Est., 260 Pa. 395. If the party in whose favor it was created is sui juris, and there is no limitation over of income or principal, and no ultimate purposes of any kind requiring its continuance expressed, except suck as is implied from tke direction to pay over income, a termination may be decreed (Wood’s Est., 261 Pa. 480; Deniston v. Deniston, 268 Pa. 224; 22 P. & L. Dig. Dec. 38226), but tke whole will must be examined to discover tke purpose of tke testator: Schuldt v. Reading Trust Co., 270 Pa. 360.

In tke present case, tke only duty of tke trustee was to invest tke fund, but tkis arrangement was evidently intended to conserve tke principal so tkat tke same migkt pass to tke issue of Jokn, or, if none, to tke brotkers and sisters or tkeir keirs. Expressly or impliedly, tkere was a gift to otkers tkan tke life tenant (Lippincott’s Est., 276 Pa. 283), and, for tke preservation of tkeir rigkts, it is necessary tkat tke arrangement continue, unless tke fund be transferred to kim, upon giving security in tke manner provided by law.

It is suggested tkat tke agreement made by tke widow and keirs, joined in by Jokn, alters tke situation, in tkat tkey evidence an intention to substitute for tke testamentary trust a plan of tkeir own, since tkey tkere gave to tke petitioner a part of tke principal. Wketker legally a portion of tke moneys keld could be tkus transferred, and tke trustees protected in case tkere subsequently was issue, need not be considered; for present purposes, it is sufficient to say tkat all tken treated and denominated tke remaining $2,000 as keld in trust for tke purposes set fortk in tke will. Tkis was created not only for tke benefit of tke son, but for kis family, if any tkere skould be, and tken over, and we cannot say tkat no otker interests required protection. Tkis being true, tke principal could not be transferred witkout proper provision for tke rigkts of tke remaindermen, and tke learned court below was correct in so kolding.

Tke decree is affirmed and appeal dismissed at tke cost of appellant.