Court Opinion

ID: 6390361
Source: CourtListenerOpinion
Date Created: 2022-06-25 00:18:12.200119+00
Date Added: 2024-06-11T15:50:41.594347
License: Public Domain

Dissenting Opinion

Lefever, J.,
December 20, 1957. — More than 12 years ago the Pennsylvania Legislature, conscious of the ever-growing intricacies, complexities and difficulties in the application and administration of the Pennsylvania rule of apportionment, enacted the Uniform Principal and Income Act of May 3, 1945, P. L. 416, 20 PS §3471, thereby adopting the more exact and readily workable so-called-“Massachusetts Rule.” This was reenacted as the Principal and Income Act of July 3, 1947, P. L. 1283, 20 PS §3470. These statutes *72have been held inapplicable to estates created prior to their enactment: Crawford Estate, 362 Pa. 458; Pew Trust, 362 Pa. 468; Warden Estate, 382 Pa. 311. The intricacies and variations of corporate finance and distributions to shareholders ever change and increase. Hence, trustees and the courts are still constantly struggling with new problems as to the application of the Pennsylvania apportionment rule.
In Jones Estate, 377 Pa. 473, the Supreme Court endeavored to terminate or at least to limit controversy on this subject by enumerating in precise terms the four situations in which the Pennsylvania rule of apportionment applies to those estates excepted from the applicability of the statutes. The court stated at page 476:
“Such an apportionment can and should be made upon the happening of any one of four events, namely, (1) the distribution by the corporation of an extraordinary cash or stock dividend, or (2) the liquidation of the corporation, or (3) a sale of the stock by the trustees, or (4) the issuance of stock rights: King Estate (No. 2), 355 Pa. 64, 65, 48 A. 2d 858; King Estate (No. 1), 349 Pa. 27, 36 A. 2d 504; Buist’s Estate, 297 Pa. 537, 147 A. 606; Earp’s Appeal, 28 Pa. 368; Nirdlinger’s Estate, 290 Pa. 457, 139 A. 200; Mallory’s Estate, 285 Pa. 186, 131 A. 714; Waterhouse’s Estate, 308 Pa. 422, 162 A. 295; Jones v. Integrity Trust Co., 292 Pa. 149, 140 A. 862.
“Appellants now seek to have the Rule of Apportionment extended and applied to cases where a merger occurs and surplus and undivided profits are capitalized as part of the merger. We find no reason or authority or justification for such an extension.”
There is a time when accomplishment of real justice requires the exactness and sureness of a precise and workable rule rather than the ephemeral will o’ the *73wisp of an equitable doctrine which requires constant redefinition. Lord Coke’s famous aphorism is apposite, . . the knowne certaintie of the law is the safetie of all”.3
The majority opinion in the instant case concedes that: “This precise question has apparently never been decided by our Supreme Court”, and then proceeds to extend the area of apportionment to stock splits, which were supported in part by a capitalization of earned surplus. Because of the complexities and difficulties involved in the application and administration of the Pennsylvania rule of apportionment, because of the public policy established by the legislature in 1945 in adopting the Uniform Principal and Income Act and finally because of the pronouncement in Jones Estate, supra, I am of the opinion that the Pennsylvania rule of apportionment should not now be extended beyond the four events specifically enumerated by the Supreme Court in Jones Estate. It follows that the stack splits of Gulf Oil Corporation and the General Electric Corporation in question should not be considered apportionable events. (If these were apportionable events, I would concur in the remainder of the majority opinion.)
For the reasons stated, I dissent.

 Coke, on Littleton, vol. II (19th Ed.), p. 395.