Megargee's Estate

Steakne, J., Testator died in 1865, leaving a widow and seven children. By his will he gave the residue of his estate, in trust, to pay the income to his wife for life, or widowhood, and then in further trust: “And from and immediately after the decease or intermarriage of my said wife, whichever shall first happen, then in trust to pay the said net rents, issues, profits, interest and income unto all my children that shall then be living and the lawful issue of such of them as shall then be deceased, their respective heirs, executors, administrators and assigns, for and during all the term of the respective natural lives of them my said children and the life of the survivor of them so nevertheless that such lawful issue take and receive such part and share only as his, her or their deceased parent would have had and taken if then living . . . and from and immediately upon the expiration of one year after the decease of the longest or last survivor of them my said children, then I give, devise and bequeath all my said residuary estate, real and personal and mixed whatsoever and wheresoever and including all net income thereof accumulated between the day of the decease of the said last surviving child and the expiration of the said one year thereafter unto all and every my grandchild and grandchildren if there be more than one that shall then be living and the lawful issue of such of them as shall then be deceased, their respective heirs, executors, administrators and assigns, forever, in equal parts and shares by heads, and not by stocks, so nevertheless that such lawful issue take and receive such part and share only as his, her or their deceased parent would have taken if then living. . . .” In 1893 the widow died, having outlived all of the seven children, except one daughter, who still survives. A grandson (who was a child of a deceased — 600 — daughter) was the only surviving issue of deceased children who was living' at the death of the widow. The grandson died in 1926. From 1893 (the date of the widow’s death) until 1926, the daughter and the grandson shared the income equally. At the audit of the account, the executrix of the grandson claimed the one-half share of income, theretofore paid unto him, until the termination of the trust (on the death of the surviving daughter). The grandson left surviving him three children, who contend that this share is payable unto them under the terms of the will. The Auditing Judge declined to award this share to the executrix of the grandson, and awarded it to his children. The executrix filed exceptions to the award. Exceptant’s contention is that the testator created a vested estate pur autre vie in the income which he gave to his children and issue of deceased children who should be living at the death of his -widow until the death of the last surviving child. She relies upon Little’s Appeal, 81 Pa. 190, and the cases following it. On the other side, it is urged that the will exhibits an intention to preserve the estate for the grandchildren of the testator and their issue until the death of the survivor of his children, when division of the principal is to be made to them. They insist that the doctrine of Rowland’s Estate, 141 Pa. 553, and similar cases, is applicable, and not that of Little’s Appeal. It is undoubtedly true that a testator may lawfully create an estate pur autre vie in income. An excellent statement of this principle has been given by our President Judge in Leech’s Estate, 18 Dist. R. 527 (page 531), affirmed in 228 Pa. 311: “. . . there is no difference in substance between a gift of income and a gift of principal; there is no presumption that because the gift is of income, it must necessarily cease on the death of the beneficiary. It is quite possible to make a bequest of income to cover the entire period of the trust, and then the beneficiary will transmit his property in the income, in case of his death, to those who succeed to his estate, either under his will or under the intestate laws.” Judge Lamorelle again emphasized this thought in his dissenting opinion in Babcock’s Estate, 18 Dist. R. 453 (page 456): “An estate pur autre vie, like its title, is somewhat archaic and infrequent, but it is neither unlawful nor unreasonable. If a testator may devise an estate to A for life and to B in fee, he may reasonably give the income of a trust fund, different in character, to C for the life of A, and then, on the death of A, give the principal of the trust fund to some one else.” The leading authority for this legal principle is Little’s Appeal, supra. In that case the testator created a trust which was to continue until the marriage or death of his daughter Elizabeth, to whom, after his wife’s death, he gave two-thirds of the income and the remaining one-third to his daughter, Martha. There was no gift over of the income upon the death of Martha, nor was there an express limitation of the income to Martha’s life. Martha died intestate, leaving a husband and children, in the lifetime of Elizabeth, who had remained unmarried. It was there held that this was a vested gift to Martha for the life of Elizabeth, subject to being determined by her marriage, and, therefore, passed to Martha’s legal representatives. While conceding the existence of this legal principle, nevertheless, it is always the intention of the testator which must govern. As was said by Penrose, J., in Babcock’s Estate, supra (page 454): “The duration of an estate created by will is always a question of intention, to be determined, not — 601 — by the precise, literal meaning of the words, but by the effect and consequences and by its harmony with the general scheme of the will, taken in its entirety.” In Rowland’s Estate, the will directed that certain sums be paid out of the income to certain of his children annually during life, the net balance of income to be divided annually, per stirpes, among his five living children, the issue of two deceased children, and the issue of any other of his children who might die leaving issue. Such distributions were directed to be made annually until the death of the last survivor of the testator’s children, when the principal was to be divided equally, per stirpes, among the issue then living of the seven children. A son of the testator died, leaving no issue surviving him, and, as in the present case, the administrator of his estate claimed the share of income theretofore paid to the son until the death of the last surviving child. It was there held that it was only living children of the testator and living issue of deceased children, the latter to take in the right of the parent, or per stirpes, that shared in the income. It was decided that each child living at the death of the testator took a vested interest in the income, but for his own life only. Justice Williams said, page 560: “An examination of the several provisions of the will shows that the intent which dominates the instrument is to preserve the entire estate for the grandchildren, and to make division among them per stirpes on the death of the last surviving child.” And, again', on page 561: “. . . each child living at the death of the testator took a vested interest in the income, but reduces his interest to an estate for his own life. This effectuates the purpose of the testator. It provides for his own children while they live, and it secures his estate to his grandchildren without loss, when the event upon which their right to take as absolute owners shall happen.” The test as to whether any given case falls under Little’s Appeal, or under Rowland’s Estate, is found in the case of Huddy’s Estate, 257 Pa. 528. This decision affirmed the judgment of the Superior Court, where the opinion was delivered by Mr. Justice Kephart, who said, on page 533: “All of the cases following Little’s Appeal are distinguished by the absence of any purpose of the testator to appropriate the estate exclusively to a class of legatees,” and cites Rowland’s Estate and Babcock’s Estate as illustrations of this latter principle. Applying this test, which we believe to be the correct measure, we have examined all of the authorities cited by counsel and which we find reported. Following Little’s Appeal are Ritter’s Appeal, 190 Pa. 102; Hildebrant v. Hildebrant, 42 Pa. Superior Ct. 190; Spang’s Estate, 49 Pa. Superior Ct. 314; Harned’s Estate, 54 Pa. Superior Ct. 47; Bechtel’s Estate, 85 Pa. Superior Ct. 14; Shuster’s Estate, 4 D. & C. 119. In each of the foregoing cases an examination discloses the gift of income to individuals, either by name or designation, with no gift over to any class as such. Another class of cases follows Little’s Appeal. In these cases income is given to children for their respective lives, and upon death of a child during continuation of the trust, the testator directs the income of the deceased child’s share to be paid to such deceased child’s children or issue. See Leech’s Estate, 228 Pa. 311; Dillon’s Estate, 47 Pa. Superior Ct. 158; Lafferty’s Estate, 59 Pa. Superior Ct. 24. In these cases, while the children have life estates only, issue of a child substituted at the child’s death are held to have an estate pur autre vie, on — 602 — the theory that the gift to the issue is not limited to a life estate, and there is no gift over of this share of income. Under Rowland’s Estate and the' cases following it, the question is whether the testator intended to create estates pur autre vie or whether he intended to provide for distribution of the income among living descendants until the termination of the trust: Huddy’s Estate, 257 Pa. 528; Maxwell’s Estate, 261 Pa. 141; Lippincott’s Estate, 2 D. & C. 1; Reeves’s Estate, 8 D. & C. 277. In Huddy’s Estate, the bequest was to a niece for life, and, “from and immediately after her decease, then to pay the said income in equal shares to her children . . . and to the children of any of her said children who may be deceased . . . until the death of the last of my said niece’s children.” The principal was then to be divided equally “between my said niece, grandchildren, and the issue of any grandchildren who may be deceased, per stirpes” It was there held that a grandniece having died without issue, her interest in the income terminated with her death. Rowland’s Estate was cited and the opinion of the Superior Court, reversing the court below, was sustained under the opinion of Mr. Justice Kephart hereinbefore referred to. In Maxwell’s Estate, a testator having eight children and owning certain stock bequeathed his residuary estate to trustees for the benefit of his wife for her life and directed his trustees, after her death, to hold said stock “for and during the lifetime of my children and the survivor of them and to pay out of the dividends realized therefrom the sum of $600 per annum to my daughter . . . during her lifetime, and the balance of said dividends, if any, to divide equally among my other children, share and share alike, the issue of any deceased child to take its parent’s share. And upon the death of my said daughter ... I order my said trustees to divide the entire dividends realized from my said stock equally among my children, share and share alike until the death of my last surviving child. Upon the death of my last surviving child, I order and direct my trustees ... to sell my stock . . . and divide the proceeds equally among my grandchildren, per stirpes.” After the death of testator and his wife, one of their children died intestate, unmarried and without issue. It was there held that the testator intended the children and grandchildren to be the sole objects of his bounty and to confine the succession to the share of any dying without issue to the survivors, to the exclusion of personal representatives. Mr. Justice Potter, in rendering the opinion, said, page 143: “While there is no express gift over of any part of the income upon the death of one of testator's children before the arrival of the time fixed for final distribution of the principal, the will shows clearly an intention that the entire income shall be paid to testator’s children and grandchildren and to no other persons.” Again, page 146: “Technically, the gift was pur autre vie. . . . Why should a mere fiction of the law be permitted to govern in such a case as this when it is apparent that the testator intended her children and grandchildren to be the sole objects of her bounty?” With the light of the foregoing authorities and applying the test enunciated in Huddy’s Estate, we have examined the words of the present will and have considered it from its four corners. We are irresistibly drawn to the conclusion that the testator had in mind two classes of beneficiaries, first, his children, and, second, his grandchildren. Clearly he desired his children or their issue living at the death of his widow to enjoy the income until the death of the last surviving child, when the principal should pass to his living grandchildren or living issue of deceased grandchildren. The words of the will show an intent to preserve the principal of the trust strictly fon his descendants and distribution of the income until the time of distribution — 603 — arrives, per stirpes, among the living children and living issue of deceased children. He expressly excluded from income any children or issue of deceased children who might be deceased at the widow’s death. The income was given to children “that shall then be living and the lawful issue of such of them as shall be deceased.” It is a fair inference of intention that when the testator carefully limited the income at his wife’s death to his children and their issue who might then be living, and provided for a distribution of the principal to the grandchildren or their issue living at such period of distribution, he intended to limit the enjoyment of income to living children and living issue of deceased children. To summarize: The fact that the testator clearly limited the principal tc his descendants living at the time of distribution; that the language used obviously limits the children to income for their “respective lives only;” and, also, that the division of income at the wife’s death is clearly limited to children and issue of deceased children then living, all point to a general intent that the income shall be distributed from time to time among testator’s descendants living at the time of distribution, rather than an intent to create an estate pur autre vie. Great stress was laid at the argument upon the use of the words “their heirs, executors, administrators and assigns” in the gift of the income. It is to be observed that identical words are employed in the gift of the principal in remainder. Since the Act of April 8, 1833, P. L. 249, re-enacted in the Wills Act of 1917, words of inheritance or perpetuity are unnecessary to pass a fee in the absence of words of limitation: Rengier v. Kunzler, 246 Pa. 445. It is conceded that there was a vesting of an absolute estate in the income. The present inquiry, however, is to ascertain whether or not the vesting was for the life of the surviving child or was limited to the lifetime of the beneficiary. From a reading of the will as a whole and for the reasons herein-before given, we are of opinion that the vesting was for the life of the beneficiary only. We feel that the use of these words is not conclusive and controlling, that the testator intended to create, in the income, an estate pur autre vie. Exceptant further contends that the question now raised was decided in this case in her favor by Judge Hanna in 1903, and is, therefore, res adjudi-cata. At that time the administrator of a deceased grandchild claimed a share of income. This was denied by Judge Hanna upon the ground that the grandchild had died in the lifetime of the widow and was, therefore, not one of the designated beneficiaries under the terms of the will. Judge Hanna did express an opinion that had the grandchild survived the widow, her administrator would have taken as herein contended. However, as pointed out by Judge Gest in the present adjudication, this opinion, not being necessary to the decision of the matter then before him, was “merely dictum,” and is, therefore, not controlling in the present inquiry. The Auditing Judge agrees with us that he did not intend in his adjudication to hold or imply that Little’s Appeal has been overruled or1 modified by the later decisions herein quoted, but rather that Little’s Appeal does not apply where the general intent of the will is to appropriate the estate exclusively to a given class of legatees. This principle had not been so emphatically and repeatedly enunciated by the Supreme and Superior Courts when Judge Hanna wrote his adjudication. At that time the courts were more inclined to follow the strict canon of construction of Little’s Appeal rather than to seek and enforce the true intention of the testator to be discovered from the will in its entirety. — 604 — After a careful review of the entire record, we are of opinion that the Auditing Judge was correct in his interpretation, and the exceptions of Heloise C. Wright, executrix under the will of Samuel Megargee Wright, are dismissed. The Auditing Judge sustained objections to the competency of the testimony of claimants who presented rent claims and claims for fees for appraising real estate arising from contracts alleged to have been made by them with the deceased trustees. All of the cases pertaining to this subject have been analyzed and discussed in the adjudication, and we cannot'profitably add anything to what the Auditing Judge has so well said. These exceptions are, therefore, dismissed. All exceptions having been dismissed, the adjudication is confirmed absolutely.