Case Name: Derbyshire's Estate
Court: Philadelphia County Orphans' Court
Jurisdiction: Pennsylvania
Decision Date: 1931-12-14
Citations: 16 Pa. D. & C. 200
Docket Number: No. 482
Parties: Derbyshire’s Estate.
Judges: Before Lamorelle, P. J., and Gest, Henderson, Van Dusen and Sinkler, JJ.
Reporter: Pennsylvania District and County Reports
Volume: 16
Pages: 200–207

Head Matter:
Derbyshire’s Estate.
Before Lamorelle, P. J., and Gest, Henderson, Van Dusen and Sinkler, JJ.

Opinion:
The facts appear from the adjudication of
Lamorelle, P. J., Auditing Judge.
Alexander J. Derbyshire, who died March 29, 1879, by the seventh item of his will, gave his executors and the survivors and survivor of them the residue of his estate in trust to pay Algemine D. Smith $4000 per annum for the period of two years, and to continue to pay said sum to her during the term of her natural life; to pay to his cousin, Caroline Derbyshire, $800 per annum for life; to pay to his cousin, Eliza Ann Henszey, $600 per annum for life; to pay to Alexander J. Derby-shire, Jr., $1000 when he should arrive at the age of twenty-one years; and after the decease of the said Algemine D. Smith, Caroline Derbyshire and Eliza Ann Henszey and of the said Alexander J. Derbyshire, Jr., before his arrival at the age of twenty-one years, "to convey, assign, transfer, set over and pay unto the Contributors to the Pennsylvania Hospital, their successors and assigns, for the charitable uses of the said Institution, all the rest, residue and remainder of my estate, real and personal, and of the income, rents, issues, profits and accumulations thereof which may remain in the hands of my said executors unsold or undisposed of as aforesaid after the decease of the said Algemine D. Smith, Caroline Derbyshire, Eliza Ann Henszey and Alexander J. Derbyshire Junior as aforesaid, and after paying and discharging all my debts and funeral expenses, and all the annuities, legacies, bequests and sums of money hereinbefore and hereinafter devised and bequeathed or directed to be paid, and after paying for and discharging all the charges, taxes, repairs and insurance upon all my estate and property, real and personal, and all the charges and expenses incident to the sale, management and settlement of my estate and property as .aforesaid and as hereinafter mentioned."
Algemine D. Smith and Eliza Ann Henszey, two of the annuitants named, are dead, and Alexander J. Derbyshire, Jr., has been paid his legacy of $1000 as provided by the will of testator.
Caroline Derbyshire, now Sehelling, one of the surviving annuitants, executed a.deed, whereby her annuity has been released, and attached hereto, marked "A," and made part hereof is a writing, signed by Caroline D. Schelling, in which she states, for an adequate consideration by her received, she releases and forever discharges The Provident Trust Company, substituted trustee, from all liability, claim and demand, charge or lien, on account of or by reason of the annuity of $800 per annum bequeathed to her under the item of the will above recited.
Malcolm Lloyd, Jr., was called as a witness, and he stated that he was a member of the Board of Managers of the Contributors to the Pennsylvania Hospital, and during the last year chairman of the finance committee; that the corporation is in debt to the extent of over $3,000,000 on which it is paying interest; and that if the trust were terminated there would be a saving to the institution per year of from $170,000 to $180,000.
The Auditing Judge is asked to terminate the trust and to award the balance of principal and income to the Contributors to the Pennsylvania Hospital.
This is the third time that this court has been asked to terminate the trust. On the first occasion the court was asked to set aside a sufficient sum for the purpose of paying the annuities and that the balance should be transferred to the hospital for the charitable uses of the institution. The orphans' court for this county made the decree asked for [38 L. I. 270, 11 W. N. C. 22], whereupon an appeal was taken by the executors to the Supreme Court, and that court reversed in Biddle's Appeal, 99 Pa. 525; and in doing so, used the following language: "Why then shall the clear and explicit directions of the testator be disobeyed? His right to postpone the time when the hospital shall enjoy the fruit of his bounty cannot be denied. It is not in conflict with any principle of public policy, of religion or morality, and does not impinge on any statute. Pull effect must, therefore, be given to the clear intent of the will: Bainbridge's Appeal, 1 Outerbridge [97 Pa.] 482.
"Reasons satisfactory to the testator induced him to withhold all aid from the hospital until the time when the whole trust of the executors was to be determined. In giving construction to this will, we need not seek for the motive of the testator. It was not necessary for him to state it, and he has not. His beneficiaries have no right to inquire his reasons for giving at once to some, and after a long interval, to others. He may have thought it for the best interests of the hospital to withhold his aid, until he could give it the whole residuary fund of his large estate. He may have thought its future necessities would be greater than the present. In the absence of reasons stated by him, we must not conjecture some, and thereby prevent the reasonable and natural meaning of the language used. As was said in Bainbridge's Appeal, supra, the testator may have thought, as the good man of the house said to the laborer who complained of the inequality of payment, 'is it not lawful for me to do what I will with mine own?'
"It is of no consequence that we may think the testator might well have given a portion of his estate to the hospital on his death, or at some earlier period of time, than expressed in his will. He thought otherwise, and the opinion of others as to what he ought to have done, cannot be substituted for what he did do. His will must control. The language thereof is too clear to attempt to construe that which needs no construction. We think the learned judge erred in decreeing that a portion of the fund be now paid over to the Contributors of the Pennsylvania Hospital. They must abide their time."
Thirty years later another attempt was made by the remainderman to secure an immediate award. At this time, 1913, some of the original trustees were still living but two of the annuitants had died. The third annuity was, however, in existence, the annuitant, Caroline D. Schelling, being alive and not having extinguished her annuity. Notwithstanding the fact that the surviving annuitant indicated a willingness to make such disposition of the annuity as would facilitate the wishes of the remainderman, the surviving trustees stood upon their right to retain the legal title and to continue the administration of the trust. A decree adverse to the contention of the remainderman [22 Dist. R. 153] was affirmed by the Supreme Court in Derbyshire's Estate, 239 Pa. 389; and in sustaining the action of the court below, the court quoted what was said in Biddle's Appeal, supra, as aforesaid.
Counsel for the Contributors calls attention to the fact that all the original trustees are dead and that Mrs. Schelling's annuity has ceased to exist by virtue of a valid extinguishment. The remainderman calls further attention to the fact that the corporate trustee, which has been substituted for the original trustees, is not insisting upon retention of the legal title but is willing to facilitate the immediate enjoyment of the residuary estate by the remainder-man; he contends, therefore, that the trust has ceased to be an active one and that the only possible reason for continuing the same would be to enable the substituted trustee to earn and collect commissions which it does not claim. He contends, further, that the matter before the court is not res adjudicata and that a new situation is presented; that it is inconceivable that the testator intended further to postpone enjoyment after the death of all the trustees and the termination of all the annuities; and that it would seem to be an ideal case for the application of the doctrine of acceleration. He further calls attention to the Act of April 14, 1931, P. L. 29, providing for the acceleration of vested remainders to literary, scientific, charitable or religious corporations or associations. That act provides, inter alia, that the court may decree the termination of a trust where testator has directed the payment of an annuity or annuities, with vested remainder to a corporation or association formed for literary, scientific, charitable or religious purposes, if it be made to appear to the court that all parties in interest in said trust, still living or in corporate existence, have agreed that the trust be settled and ended upon terms mutually satisfactory to them. This act does not apply because testator died many years before its passage; nor does the Auditing Judge understand that there is any contention that it does. It might be noted that there is a proviso to the act which states that it shall not apply where testator shall have declared his purpose to create by accumulation a fund for the benefit of a literary, scientific, charitable or religious corporation or association. Counsel contends that the proviso is inapplicable because accumulation in the instant case was not the primary purpose of the testator but a mere incident to the inadequacy of the annuities to exhaust the income.
The court is earnestly requested to terminate the trust because all parties in interest consent to an immediate award and because no one can possibly be aggrieved by such a decree.
The Supreme Court has on two occasions emphatically stated that the time for the enjoyment of the principal was fixed at the death of the survivor of the annuitants and that distribution cannot be made prior thereto; that the testator, for reasons best known to himself, has fixed that as the time; that if a different time were substituted, it would be prior to the expressed direction of the testator; and that the direction of the testator must be obeyed. In the opinion of the Auditing Judge, the matter is res adjudicatei. The conditions, it is true, have changed, but the Auditing Judge has found by the decision of the Supreme Court that there can be no acceleration of the remainder interest, and he, therefore, declines to terminate the trust. '
George Wharton Pepper, for exceptant; Howard H. Yocum, contra.
December 14, 1931.
Henderson, J.,
The facts are fully set out in the adjudication and need not be repeated.
Under the facts as they existed at the time of the death of the testator (1879), and again in 1913, our Supreme Court declined to terminate the trust for accumulation for this charity. The fund has grown from about $300,000 to about $3,000,000, which is vested in remainder in the hospital free from all trusts except the proper uses of the corporation.
The Act of April 14, 1931, P. L. 29, empowers the court where everyone requests it to terminate the trust, and in terms it seems to apply to the state of facts as they now exist. The Auditing Judge has ruled that the act does not apply because the testator died many years before its passage.
The exceptant contends that it does apply and the corpus and accumulations should be awarded to the hospital.
The question is, therefore, presented — can the legislature retrospectively empower the court to terminate this trust? If it can, the exceptions should be sustained.
At the outset, it should be recalled what was so well stated by Chief Justice Waite in Munn v. Illinois, 94 U. S. 113, 123:
"Every statute is presumed to be constitutional. The courts ought not to declare one to be unconstitutional, unless it is clearly so. If there is doubt, the expressed will of the legislature should be sustained."
And, again, at page 132, he said:
"Of the propriety of legislative interference within the scope of legislative power, the legislature is the exclusive judge."
What is the source of the power of the legislature? Quoting again from the opinion of the learned Chief Justice in Munn v. Illinois, he said (p. 124) :
"When the people of the United Colonies separated from Great Britain, they changed the form, but not the substance, of their government. They retained for the purposes of government all the powers of the British Parliament, and through their State constitutions, or other forms of social compact, undertook to give practical effect to such as they deemed necessary for the common good and the security of life and property. All the powers which they retained they committed to their respective States, unless in express terms or by implication reserved to themselves. Subsequently, when it was found necessary to establish a national government for national purposes, a part of the powers of the States and of the people of the States was granted to the United States and the people of the United States. This grant operated as a further limitation upon the powers of the States, so that now the governments of the States possess all the powers of the Parliament of England, except such as have been delegated to the United States or reserved by the people. The reservations by the people are shown in the prohibitions of the constitutions." '
The boots are full of retrospective legislation. The Act of May 9, 1889, P. L. 173, saving charitable gifts from failure, expressly provides: "That no disposition of property heretofore or hereafter made for any religious or charitable use, shall fail . . ." etc.
The Act of May 23, 1895, P. L. 114, amending the Act of April 26, 1855, so as to extend the provisions of said act to dispositions of property made prior to the passage of said act, provides: "That no disposition of property heretofore or hereafter made for any religious, charitable, literary or scientific use shall fail. . . ." etc.
The legislature may not retrospectively legislate on penal matters nor impair the obligation of contracts; neither is attempted in the instant case.
In Weister et al. v. Hade et al., 52 Pa. 474, 481 (1866), our Supreme Court said:
"These cases establish two things: first, the power of the legislature to legislate retrospectively in all matters not penal, not violative of contracts and not expressly forbidden by the Constitution; second, to act directly upon individual rights."
In Swartz v. Carlisle Borough, 237 Pa. 473, 478 (1912), it said:
"It is settled law in Pennsylvania that the legislature has the power to legislate retrospectively on all matters, not penal, nor in violation of contracts, not expressly forbidden by the Constitution."
In Towanda Borough v. Fell, 69 Pa. Superior Ct. 468 (1918), our Superior Court said:
"It is the law of Pennsylvania that the legislature has the power to legislate retrospectively on all matters, not penal nor in violation of contracts, not expressly forbidden by the Constitution."
While the propriety of such legislation is entirely for the legislature, the public policy involved should not be overlooked in these times of economic stress. It was the intention of the General Assembly that this great fund for hospital relief of the community should be immediately made available to the public.
The Act of April 14, 1931, is one declaring a public policy; it may be conceded that if it had been on the statute books at the time this will became operative the public policy therein declared would have been followed; what could have been done prospectively may be done retrospectively, there being no violation of a contract nor of a penal matter.
To summarize — we find the question involved is not res adjudicatet; that the Act of April 14, 1931, P. L. 29, applies in terms to the instant trust; that the act is within the power of the legislature; that there is no constitutional prohibition of the subject matter of this' act; and that under the act this court, in the exercise of the discretion conferred, should terminate the trust.
The exceptions are sustained and the trust terminated, and the entire fund, principal and income, is awarded to the Contributors to the Pennsylvania Hospital.
Van Dusen, J., concurs in this opinion.