In re Bard's Estate

• Court: United States State Supreme Court of Pennsylvania
• Writing for the Court: BARNES, Justice
• Citation: 13 A.2d 711
• Parties: In re BARD'S ESTATE.
• Decision Date: 30 May 1940

13 A.2d 711

In re BARD'S ESTATE.

Supreme Court of Pennsylvania.

May 30, 1940.

13 A.2d 711

Rehearing Denied June 25, 1940.

Appeal No. 76, January term, 1940, from order of Orphans' Court, Berks County, June term, 1938, No. 5; Marx, President Judge.

In the matter of the estate of Adam Bard, deceased. From an order dismissing exceptions by Mamie Bard and another to an auditing judge's adjudication, awarding all funds in the hands of the Reading Trust Company as trustee under deceased's will to the receiver of the Penn National Bank & Trust Company for payment of a bank stock assessment and rejecting exceptants' claim for a surcharge against the trustee, they appeal.

Affirmed.

Argued before SCHAFFER, C. J., and MAXEY, DREW, LINN, STERN, BARNES, and PATTERSON, JJ.

Charles B. Ermentrout and Robert Brigham, both of Philadelphia, for appellants.

Thos. I. Snyder and Zieber & Snyder, all of Reading, for appellee Reading Transit Co.

Russell H. Yoder, of Reading, for appellee Harvey S. Adams, receiver of Penn Nat. Bank, etc.,

Thomas W. Leidy, of Reading, trustee ad litem.

13 A.2d 712

BARNES, Justice.

This appeal raises the question whether the trustee in the present case should be surcharged for failure to apportion a stock dividend and the proceeds of stock subscription rights between the life tenants and remainder interests.

The testator, Adam Bard, died on January 25, 1901. At the time of his death he owned 30 shares of Reading Trust Company stock, appraised at $3,750 and 24 shares of Penn National Bank of Reading stock, appraised at $5,832. He specifically bequeathed these shares to the Reading Trust Company "in trust to hold the same and to pay the income and dividends therefrom to Mamie Bard and Laura Bard [his grandchildren] for and during their natural lives and at and upon the death of either of them without issue * * * to pay the income and dividends to the survivor for and during her natural life." As both life tenants are now living and unmarried, it is unnecessary to state the provisions of the will respecting the distribution of the principal of the trust. The shares were awarded to the trustee which received them as of April 30, 1901.

In August 1924 the trustee received from the Penn National Bank rights to subscribe to 48 shares of its stock, and in July 1930 rights to subscribe to 200 shares. These rights were sold by the trustee for $1,488 and $148.49, respectively, and the net proceeds were allocated by it to the corpus of the trust and reinvested in mortgage participation certificates. In June 1930 the original 24 shares of the Penn National Bank, received from the testator, having a par value of $100 per share, were exchanged for 240 shares having a par value of $10, and on or about July 1, 1930, a stock dividend of 360 shares was declared which the trustee has retained as principal, thereby increasing the holding of the estate to 600 shares of this stock.

In 1933 the Penn National Bank and Trust Company, successor to the Penn National Bank, became insolvent and a receiver was appointed. On January 15, 1935, the Comptroller of the Currency levied an assessment of 100% upon the shareholders of the Bank, and a claim against this estate for $6,000 was made by the receiver. Thereupon, on April 30, 1938, the trustee filed its first account from which it appeared that the principal and income then in its hands were insufficient to pay the assessment and the interest thereon.

At the audit in the court below, the claim of the receiver was resisted by the life tenants and by the trustee ad litem for unborn contingent remaindermen. The life tenants also asserted a claim for surcharge against the trustee for the proceeds of the stock subscription rights and for...