Court Opinion

ID: 6380898
Source: CourtListenerOpinion
Date Created: 2022-06-25 00:00:27.63592+00
Date Added: 2024-06-11T15:50:21.042339
License: Public Domain

Ladner, J.,
dissenting. — I regret that I am unable to. agree with the disposition that the majority of my colleagues make of the exceptions.
Our Supreme Court in Scanlon’s Estate, 313 Pa. 424, has approved the statement of the law with relation to tentative trusts as laid down by section 58 of the A. L. I. Restatement of Trusts, which reads:
“Where a person makes a deposit in a savings account in a bank in his own name as trustee for another person intending to reserve a power to withdraw the whole or any part of the deposit at any time during his lifetime and to use as his own whatever he may withdraw, or otherwise to revoke the trust, the intended trust is enforceable by the beneficiary upon the death of the depositor as to any part remaining on deposit on his death if he has not revoked the trust.”
The Supreme Court also quoted with approval the following portion of comment (a) of the principle mentioned :
*174“ Tf a person makes a deposit in a savings bank in his own name “as trustee” for another person, his intention may be either (1) to create a revocable trust, (2) to create an irrevocable trust, or (3) not to create a trust. Evidence may be admitted to show which was his intention. In the absence of evidence of a different intention of the depositor, the mere fact that a deposit was made in a savings bank in the name of a depositor “as trustee” for another person is sufficient to show an intention to create a revocable trust. To such a trust the principle stated in this section is applicable. The depositor may at any time withdraw any part of the deposit during his lifetime, or otherwise revoke the trust in whole or in part at any time during his lifetime, or by will, but on his death the beneficiary is entitled to the amount remaining on deposit if the depositor has not revoked the trust.’ ”
The majority quote as their authority for sustaining the exceptions the second paragraph of comment (6) to section 58 of the Restatement of Trusts to the effect that the death of the beneficiary of a tentative trust of a savings bank depositor prior to the death of the depositor terminates the trust even though the depositor died without having manifested an intention to revoke the trust and without having withdrawn the deposit, and the personal representatives of the beneficiary will not be entitled to the amount on deposit at the death of the depositor.
As I read Scanlon’s Estate, supra, our'Supreme Court has not indicated there its approval or disapproval of the ' particular paragraph of comment (b). I do not regard an adoption of a principle of the Restatement of the Law as ■ necessarily carrying with it the approval of all the comments which are appended thereto. In absence of the specific approval of the comments by the Supreme Court, we ought to be free to accept them or reject them according to logic, reasoning, and what our own applicable decisions demand.
The auditing judge states that no evidence was produced to him which would explain or disclose the settlor’s *175intention and in absence of such evidence it must be regarded as a pure and simple tentative trust. But though, as such, it is revocable in the lifetime of the settlor-donor and at his death by appropriate provision in the will: Scanlon’s Estate, supra; it is not to be regarded as either a testamentary disposition or as an incomplete gift inter vivos or mortis causa (Pozzuto’s Estate, 124 Pa. Superior Ct. 93). If therefore it is a trust, the applicable principles of trusts should be applied to the end that a correct and logical conclusion be reached.
I agree with the auditing judge that a tentative trust in absence of all other evidence of intention is not to be regarded as an executory trust but as an executed trust. It should be regarded in essence with the same force and effect as though it were a trust specifically set up by an instrument in writing, in which the settlor reserved to himself the several powers, to revoke in his lifetime, to consume the principal (or as much thereof as he chooses), and to revoke the same by last will and testament. Judge Kun in In re Mines, 31 D. & C. 153, has accurately explained its nature in the following language:
“When one makes a deposit of money, or transfers a deposit, fin trust’ for another, there is created in the intended beneficiary of the trust account ‘an immediate interest’ therein, but tentative in character, because subject to revocation by the depositor-donor. However, if the right of revocation is not exercised by the donor in his lifetime, or in his will, it is as though the right of revocation had never existed, so that what was ‘an immediate interest’ in the donee, but tentative in character, becomes, through the non-action of the donor (in not exercising the right of revocation), absolute”.
Thus considered, the second paragraph of comment (6) to section 58 of the Restatement of Trusts (there being no evidence of the depositor’s intention other than making of the deposit in trust) is at variance with the principle announced as well as the general law of trusts by which it is not the death of the beneficiary that matters, but the *176death of the depositor donor. If he has not revoked, either in his lifetime or by his last will and testament, it would seem a fair presumption that he intended it to stand.
The death of the beneficiary of course did not affect the right of the settlor to either consume the fund or revoke it in his lifetime or by his will, but the point of the matter is, if he did neither, we should not presume to do it for him.
I would dismiss the exceptions.
President Judge Van Dusen authorizes me to say he joins in this dissent.