West v. Pennsylvania Co. for Insurance on Lives

The opinion of the court was delivered, by Agnew, J. — In West’s Appeal, antea, p. 186, we held that the Act of April 17th 1869, relating to escheats, though a supplement to the Act of September 29th 1787, was without adequate means of enforcement in relation to trusts, the proceeding under the Act of 1787 being inapt, and not capable of being applied to trusts. That is said in the printed argument of this case to be an obiter dictum. We do not think so. Two questions arose there, one, whether the surplus fund of the Philadelphia Saving Eund Society was the subject of escheat; the other, whether the mode of proceeding was authorized. As to the former, we held that the surplus was the property of the corporation for the ends and uses of the charter. And as to the latter, that if the proceeding was under the 9th section of the Act of 1865, it must be by quo warranto ; and if under the Act of 1869, to escheat a trust, that act had provided no mode for its enforcement; and therefore, that there was no authority in the deputy escheator to proceed at all. Hence we concluded, that by reason of the entire want of authority, the proceeding was illegal and void of sovereign sanction. And on this ground he was to be enjoined as an individual acting wholly without authority; and not as an officer executing a lawful function. That case is therefore an authority, and was based, we think, on sufficient reason; nor did we overlook, as it is thought, the character of ■ the interest to be escheated, as the beneficial interest only of the cestui que trust; but the question in our minds was, how this beneficial interest could be proceeded against under and according to the mode provided in the Act of 1787, and its supplements, allowing the most liberal interpretation of its provisions. The case of The Commonwealth v. The North American Land Co., 7 P. F. Smith 102, is not parallel. That was a case of partnership property held by persons, all of whom were dead; and there is no difficulty in applying to such a case the proceeding under the Act of 1787. It was nothing more than a substitution of the property of partners for that of a single owner, and required no new mode. The case was new, but the proceeding similar. Here we have, however, not only a new case, in that of a cestui que trust unknown for seven years, but a necessity for a proceeding adapted to the case of a living trustee, with a title and a right to administer the trust unembarrassed by a dissimilar and discordant proceeding. To escheat the property in his hands, the Commonwealth must provide a means to come in under the trust deed, in room of the cestui que trust. It is just here the Act of 1787 fails to furnish an appropriate remedy. Under that act the [199] only question is, whether the intestate died seised or possessed of the property without heirs or known kindred, and the further inquiry into whose possession the same came. These facts being found, the property can be identified and described, and the inquisition certified into the proper office, and the Commonwealth can seize, attach or secure the property, unless the person in possession give bond to traverse the inquisition. These facts being found the Commonwealth has a primá, facie title, and the person in possession presumptively has no title, and is turned around to be the contestant. But a trustee is lawfully seised or possessed and no process can displace him, until he has had a day in court, and the beneficial interest is established against him. Clearly he is not in the case of one having a mere possession of property, which, by the seisin or possession and death of the owner, is east as a waif upon the ocean waste without an owner to claim it. The trustee is therefore not to be subjected to a claim of the Commonwealth without some evidence of title, and a time and place to defend against it, for he must account to the true owner, who is no party to the proceeding under the Act of 1787, and not bound by the finding of the inquest. The trustee and not he is the party in possession, and the trustee is a steward for others and must protect their rights — rights which at the time may not be defined, or even capable of definition until his account is settled. How can the ex parte finding of an inquest in such a case seat the Commonwealth upon the trust ? Dying seised or possessed is evidence of title, but not so in a case like this. How is the claim of an unknown person as the beneficial owner to be ascertained by the inquest; or in other words, how is the fact of a trust for some person not known to be ascertained, by them, except through the deed of trust and the transactions of the trustee ? But clearly this implies a power over the trustee, and a settlement of his trust; and how is this to be managed by the deputy eseheator and the inquest ? It is impossible for them to make a finding of property to be certified to the Commonwealth, except by calling in, not only the instrument of trust, but the trustee also, and investigating his affairs in order to find a fund belonging to somebody, and that somebody an unknown person. In such a proceeding it is evident that the trustee occupies the position of a party entitled to the fund, and to preserve it for the true owner, known or unknown; and therefore the right of the unknown person must be established against him by judgment. Now, for all this, the Act of 1787 and its supplements, are totally inadequate. In an attempt to administer the mode provided in them for a seisin or possession, and death without heirs or kindred, we should find ourselves at a loss in every step, and would have, in fact, to legislate, rather than administer the law. This case itself illustrates some of the difficulties to be met. It is alleged [200] that the Pennsylvania Company for Insurance on Lives, &e., holds funds under two trust deeds made three-quarters of a century ago, belonging to unknown owners. Now, under these deeds, whose claims are valid, and whose are not? who have been paid, and who not ? who survive, and who do not ? who succeed to the fund, and who do not? who are known, and who not? what are the rights of the known, and what the unknown ? Does the failure of some to claim enure to the benefit of those who do claim ? All these inquiries, and probably others, may have to be determined before an escheat can be ascertained, and who the unknown for seven years are; and what their interest to be found by the inquest. It is evident all these things can be determined only by the Court of Common Pleas having jurisdiction of the accounts of the trustee in a settlement of his trust estate in due course of law. And in the present case the jurisdiction of the court had vested, and the proceedings are still pending. Until the account be settled, how is it possible to tell who are the owners of the fund, and consequently, whether they are known or unknown; and how could the inquest therefore specify, under the Act of 1787, the estate of which the unknown owner is seised or possessed, and certify the same into the proper office, or how can the sheriff seize, attach or secure the same ? How can an inventory or appraisement of the property be made ? and on what principle, if a bond could be given, should the trustee, an admitted owner, be driven to traverse an ex parte finding ? There may be no difficulty in ascertaining the beneficial interest in the case of a dry trust, or of property in a specific form, or an unclaimed deposit, or declared dividend, but such is not the case where the trust is active, with a power to convert, collect, &c., and when the beneficial interest can only he ascertained by a settlement and a decree of distribution. In this very case what do we know about the rights of the parties ? Not a single exhibit referred to in the bill and answer is placed before us, as the appellant was hound to do under the 3d Rule, adopted September 6th 1852, 6 Harris 577. This, in itself, is sufficient to dismiss the appeal. In order to get rid of the insuperable difficulties which must arise in endeavoring to administer the Act of 1869 under the form provided in the Act of 1787, we are compelled to say, that the Act of 1869 is incapable of being carried into execution, and the legislature will have to provide some suitable mode of reaching cases of trusts, and others of like character. The decree of the judge of Nisi Prius is presumptively right, and until the appellant shows it to be erroneous, it must stand. He has not done this, and the decree is therefore affirmed, with costs to be paid by the appellant.