Court Opinion

ID: 9697743
Source: CourtListenerOpinion
Date Created: 2023-08-25 19:28:08.64282+00
Date Added: 2024-06-11T18:20:35.014596
License: Public Domain

Dissenting Opinion by
Mr. Justice Allen M. Stearne:
The majority’s extraordinary but logically untenable conclusion is that a life tenant is a debtor entitled to accretions where there are gains but is a trustee not liable for depreciations where there are losses.' Such curious result is reached because of supposed testamentary intent. It is predicated chiefly *172upon the testator’s grant of the right of the life tenant to consume, coupled with his expressions of affection for his wife, the life tenant. Such considerations, however, are not based upon testator’s express words, but upon what the majority assume he must have intended. It is a well established rule requiring no citation of authority that in the construction of a will it is not what testator may have meant but the meaning of the language used. The majority also state in the opinion: “As the law stood in 1926 when [testator] executed his will, a life tenant with power to consume had never been held to be a debtor of the remaindermen”, wherefore testator’s intention is to be determined as of the date of the execution of the will. But such doctrine cannot be applied in this case. This present will obviously is professionally drawn. It contains technical terms: “life estate”, “fee simple”, “residuary”, “remainder” and the like. But as stated by Mr. Justice Jones in Farmers Trust Company, Executor, v. Wilson et ux., 361 Pa. 43, 46, 63 A. 2d 14: “Both sides are agreed that the answer to the question for decision depends upon the testatrix’s intent, as disclosed by her will, and that, as regards such intention, the will is to be construed as of the date of its execution: [citing cases]. Such matters as the testator’s capacity, the legality of the execution of his dispositions, the nature and quantum of his estate, etc., are ordinarily ‘referable to the time and [are] determinative according to the law as it exists at the execution of the instrument’: Quin’s Estate, 144 Pa. 444, 459-460, 22 A. 965. But, even though testamentary intent is to be construed as of the date of execution of a will, if the words employed to express the intent have a legal or technical meaning, they are to be so interpreted according to the law in effect at the testator’s death unless the will contains a clearly expressed intention to the contrary.” (Italics supplied)
*173The adjudication of Judge Hunteb so completely refutes the contentions of appellants, adopted by the majority, that I cannot profitably add to what he has so ably and accurately stated: “It has been the law of Pennsylvania that where personal property is delivered into the possession of a life tenant, he is not a trustee for the remaindermen, but the relation is that of debtor and creditor. The assets become the individual property of the life tenant, and his debt to the remainder-man is the value of the assets at the time distribution was first made to the life tenant. The decree of distribution fixes the rights of the parties. The life tenant is responsible for that value, and not for any increase in the value of the fund thereafter. Likewise, any depreciation is the life tenant’s loss, and his estate at his death must respond to the full amount of the debt as originally fixed: Reiff’s Ap., 124 Pa. 145; Letterle’s Est., 248 Pa. 95; Weir’s Est., 251 Pa. 499; Kirkpatrick Est., 284 Pa. 583.
“In Powell’s Est., 340 Pa. 404, followed by Hays Est., 358 Pa. 38, this principle, was extended to life estates where there was a power to consume the corpus. In each of these cases there had been appreciation in the value of the property, which it was held belonged to the life tenant, and that she was debtor to the re-mainderman for no more that its original value. In the instant case there is a substantial loss, and the question is whether the same rule applies.
“Where the will appoints the life tenant trustee for himself and the remainderman, there is no debtor-creditor relationship, and the remainderman must take in kind: Du Puy Est., 346 Pa. 143; Erdman Est., 352 Pa. 158.
“The Estates Act of 1947, P. L. 100, §13, 20 P.S. 301, declares that in every instance the life tenant shail be deemed to be a trustee and not a debtor to the remainderman. The Act, however, does not apply *174to the present will, which came into operation before the effective date of the Act.
“Prior to Powell’s Estate, supra, it was assumed with Tittle discussion that a life tenant was not debtor to the remainderman where there was a power to consume. The ownership of the property remained in the testator’s estate, and the remainderman took in kind at the life tenant’s death such property as remained unconsumed.
' “A transfer to the life tenant’s individual name was á violation of the power, and a re-delivery was ordered to the original testator’s estate or to the remainder-man : Trout v. Rominger, 198 Pa. 91; Tyson’s Est., 191 Pa. 218; Dickinson’s Est., 209 Pa. 59; Rumsey’s Est., 287 Pa. 448. ;
“In Watson’s Est., 241 Pa. 271 (280), the life tenant was called a ‘quasi trustee’ ; and in -Metz’s Est., 323 Pa: 241, it was declared that the remainderman was not a ‘creditor’ of the life tenant.
“In Rumsey’s Est., supra, the award to the remain-derman included stock dividends; and in Nieman’s Est., 229. Pa. 41, it was recited that there had been a large increase in the value of the estate which was awarded to the executor of the original testator.
“Powell’s Est., supra, is a modification of these decisions, and is confirmed by Hays Est., supra.
“In Reiff’s Ap., 124 Pa. 145 (149), quoted in Powell’s Est., Judge Hanna said: ‘The result was in effect to make the sum thus received by testatrix a part of her individual estate. It could be invested by her in the purchase' of real estate, embarked in mercantile adventures or stock speculations, or expended in her living and family expenses as she deemed advisable. The money became essentially her own; and she was simply a debtor to the parties ultimately entitled at her death, whose claim is now payable out of her estate, and, in the event of its insolvency, by her sure*175ties upon the bond given by her as legatee for life. The remaindermen áre now creditors of the estate of testatrix, and entitled to interest from the date of her death .... It follows, therefore, that testatrix cannot be allowed compensation for the care of the so-called trust fund; ñor can it be diminished by deducting any portion of the expenses of the settlement of the estate.’ ■ .
“The rule establishing a debtor-creditor relationship removed estates from the safeguards of the law of trusts, and often brought harsh results to either life tenant or remainderman. No surety in his right mind would go on a life tenant’s bond when a bond was required, and it was formerly the law that when the court appointed a trustee to take over. the fund, the unfortunate, trustee had the same obligation as the life tenant: Weir’s. Est., 251 Pa. 499.
“However, the rule existed long as a rule of property, and neither the Legislature, nor, the Commissioners Avho drafted the Fiduciaries Act of 1917, saw fit to change it, and it was repeatedly applied down to its repeal by the Estates Act of 1947.
• “It is particularly, difficult to apply where there is a power to consume. When the property goes into the ownership and control of the life tenant, as outlined in Reiff’s Ap., supra, and loses its identity among the other property of the life tenant, there can be no certainty as to which property was consumed. The burden of proof that any property remains unconsumed is upon the remainderman: Welsh’s Est., 239 Pa. 616; Richey’s Est., 251 Pa. 324.
“The executors and legatees of Fannie C. Lyman contend that she was a trustee of the residue of his estate and not a debtor to the remaindermen, which is to be determined from the intention of testator, gathered from the language of the will and the surrounding circumstances.
*176“There is no debtor-creditor relationship where the will appoints the life tenant trustee for himself and the remainderman. To create a trust, the trustee need not be so named; if the administrative duties of a trustee are conferred upon the life tenant, such as the duty to ‘invest’, he is a trustee: Du Puy Est., 346 Pa. 143; Erdman Est., 352 Pa. 158.
“There is no duty of investment mentioned in the Lyman will.
“The contention is that the intention to create a trust may be found in other provisions of the will.
“In item IX where the testator gives his wife a life estate with power to consume, he says: ‘The true intent and meaning of this provision of my will is not to give to my dear wife either a fee simple in the real estate of this my residuary estate, or an absolute estate in the personal property, and no such construction shall be placed thereon. That my true intent and meaning of this clause is to give to my wife a life estate only in this my residuary real and personal property, and also to enable her to use so much of the principal as may be necessary for her support, in the event that the income from my residuary estate proves insufficient to supply her wants, and in the determining of what are necessary wants she is to be the sole judge.’
“There is no implication of a trust in these words. It is careful language emphasizing merely the intent to create a life estate, with power of consumption, and no larger estate. It denies a fee simple in the life tenant, but does not change the legal life estate previously given into an equitable life estate.
“In item XI the will provides: ‘I hereby authorize and empower my Executrix hereinafter named with full power and authority at any time after my decease, at her discretion, to sell or dispose of the whole or any part of my residuary estate . . . the proceeds, however, *177to be subject to all tbe conditions contained in Paragraph IX of this my Will.’ This power of sale is addressed to tbe ‘Executrix’ and contains no indication of a trust. It is entirely in harmony with tbe legal life estate given by paragraph IX: See Kumsey’s Est., 287 Pa. 448 (454).
“Tbe best argument made by tbe executors and legatees of tbe life tenant rests upon the language of the will which describes that which is given to the remain-dermen, namely, the estate ‘that may be left at the time of her decease.’ This could mean what was left, taking into consideration losses or depreciation, the widow’s consumption etc. She was the primary object of his bounty, and the will shows careful and solicitous provisions for her welfare, which are inconsistent with the thought that she should guarantee the estate of the remaindermen, who are collateral relatives and a charity, already provided for by immediate pecuniary legacies in the will.
“These arguments, however, are a reopening of the controversies determined in Powell Estate and .Hays: Estate, supra. In the former the remaindermen were given the estate ‘which may then remain’, and in the latter ‘so much thereof as may remain.’ In both it was held that a debtor-creditor relationship existed.
“No distinction can be made because in Poweli’s Estate and Hays Estate the property appreciated in value whereas in the instant case there is a great loss. A life tenant cannot be declared a debtor where there are gains, ánd a trustee where there are losses. He who takes profits must also suffer losses.”'
The majority opinion is obviously based upon a supposed injustice to the widow. The contest, however, is between thé beneficiaries under the husband’s will and those under the widow’s will. Where a rule of property becomes no longer desirable for any reason, the appropriate method of change is by legislation, or *178in appropriate situations by tbe forthright overruling of decided cases. In no event should the result be obtained by the declaration of supposed testamentary intent. Were the present case sui generis no great harm would result from this decision. There are, however, many wills executed prior to the effective: date of the Estate Act of 1947, supra, where property rights might be seriously jeopardized.
It is for these reasons I dissent. I would affirm the decree.