In re Handley's Estate

• Decision Date: 24 May 1897
• Docket Number: 66
• Citation: 181 Pa. 339,37 A. 587
• Parties: In re Estate of John Handley, deceased. Appeal of Henry W. Palmer, Lemuel Amerman and John T. Richards, Executors of the Last Will and Testament of John Handley, deceased
• Court: Pennsylvania Supreme Court

37 A. 587

181 Pa. 339

In re Estate of John Handley, deceased. Appeal of Henry W. Palmer, Lemuel Amerman and John T. Richards, Executors of the Last Will and Testament of John Handley, deceased

No. 66

Supreme Court of Pennsylvania

May 24, 1897

Argued February 26, 1897

Appeal, No. 66, Jan. T., 1897, by Henry W. Palmer et al from decree of O.C. Lackawanna Co., No. 692, Series A appraising estate for collateral tax. Reversed.

Appeal from appraisement for collateral inheritance tax.

From the record it appeared that John Handley died on February 15 1895, leaving a will by which he made various bequests to individuals and charities. He gave $250,000, to the city of Winchester, Virginia, for the purpose of founding a public library to be called "The Handley Library." His will continued as follows:

"Item. I direct and order that all of my personal property shall be sold at private sale, except that portion in which a life estate is created by this will, from time to time by my executors for the best price that can be obtained for the same, hereby giving and granting unto my said executors full power and authority to make, execute and deliver good title for such personal property.

"Item. All my real estate in the city of Scranton, Pennsylvania, except my coal lands in the state of Pennsylvania, West Virginia, and in other states, and my timber and iron ore land situate in the state of Virginia and other states, which I may own at the time of my death, I order and direct my executors to retain at rent for the period of twenty years.

"Item. I order and direct that all incomes and profits growing out of my said real estate, no matter where situate, after paying charges, life estate, repairs, taxes, and insurance shall be laid out and expended in paying in part or in whole the several bequests provided for and mentioned in this my will.

"Item. I order and direct and I hereby empower my executors or their successors to convey and sell my real estate at the end of twenty years, at public or private sale, for the highest price that may be obtained for the same, and to make and execute deed or deeds to the purchaser or purchasers thereof, said deeds to have the same force and effect as if made by order of the orphans' court after sale had according to law.

"Item. I hereby order and direct my executors from time to time to rent at the best rents or royalty all coal and other minerals in and upon my lands in the state of Pennsylvania, Virginia, West Virginia and other states, upon the same terms and conditions like minerals are rented by other parties.

"Item. I order and direct that the income arising from the royalty or rents of my said mineral lands shall be applied as follows by my executor, namely, first -- To pay the running expenses and public taxes. Second -- The balance of said rents or royalty to be paid over every six months to the directors or trustees of St. Patrick's Orphan Asylum, the House of the Good Shepherd and to the city of Winchester, Virginia, in the following proportions, namely, thirty-three and one third per cent of such rents or royalty thereof to each.

"Item. I order and direct the directors or trustees and the officers of the city of Winchester to invest said income so received in the bonds of the states of Pennsylvania or Virginia, or in the bonds of the United States, the interest whereof shall be expended and laid out in paying the expenses, from time to time, of the several institutions provided for in this my will.

"Item. I hereby order and direct my executors and their successors to rent or lease the surface of my farm and mineral lands, and to sell the timber and bark thereon, from time to time, for the best price that can be obtained for said timber and bark. And also to lease the mineral on said lands for the period of twenty years, and thereafter to convey and sell said lands as they are hereinbefore ordered and directed to sell other real estate in this my last will; giving and granting unto my said executors the same power as hereinbefore given to convey and make deeds to the purchasers thereof.

"Item. I direct and order my executors to pay over all money arising from the sale of land situate in Virginia, West Virginia, Pennsylvania and other states, and the timber and bark thereon, and all minerals in and under said land to the directors and trustees aforesaid, and to the city of Winchester, Virginia, aforesaid, in the same proportions as named herein, namely, thirty-three and one third per cent of the net income. Said income to be invested by said several corporations as hereinbefore directed, and to be laid out and expended by them and each of said corporations and the city of Winchester as hereinbefore directed.

"Item. I order and direct my executors or their successors to collect and apply all of my life insurance or so much thereof as may be required towards the payment of any debts that may be of record against my real estate at the time of my death.

"Item. I order and direct my executors to continue paying the expenses of each boy and girl that I may have at school or college at the time of my death, until each of said persons shall graduate and, when such scholars shall have finished and graduated his or her education, to pay to each boy or girl the sum of five hundred dollars out of the income of my estate.

"Item. I order and direct that if at the end of any one year the income of the money devoted to the support of the library at Winchester, Virginia; St. Patrick's Orphan Asylum or the House of the Good Shepherd shall be more than sufficient to pay the annual expenses, then and in that event I direct that the balance of said income shall be forthwith invested in interest bearing bonds of the United States or the state of Virginia and be added to the capital.

"Item. I order and direct that under no circumstances shall any portion of the capital of either or any of the institutions to which I have in this my will made bequests, sell, dispose, or pledge the same as security to meet the current expenses of said institutions.

"Item. I do hereby declare that all of the several bequests made in this my will are made upon the express condition that none of the moneys, principal, interest, rents or royalties arising from such bequests, shall be applied to any other purpose whatsoever than those specially mentioned and herein appointed.

"Item. All trust money mentioned in this my will shall be invested by my executors or the directors or trustees of the corporations named and the city of Winchester, Virginia, in United States registered bonds unless otherwise named and directed in this my last will.

"Item. I hereby order and direct my executors, unless where otherwise specially ordered, to pay the said persons, corporations and city of Winchester, Virginia, the said several sums of money bequeathed, devised and given by me, in manner following, namely: The total income obtained from my estate, real, personal or mixed, shall be accumulated for the period of two years from the date of my death and, after paying of all just debts, taxes, insurance and other charges for the preceding year, the balance remaining shall be divided by my executors pro rata among the several persons, corporations and the city of Winchester, Virginia, named in my will, in proportion to the amount bequeathed and devised to each, and so continue to pay, from year to year, on the first days of January in each year, until each and every bequest is paid in full by my executors and their successors.

"Item. I hereby order and direct that no act or deed of my executors appointed under this will or their successors shall be valid or binding upon my estate unless a majority thereof shall consent to the same in writing when the amount involved shall exceed the sum of one hundred dollars.

"Item. Should any one or more of my executors depart this life without first naming his successor in writing, and have the same acknowledged before some officer having authority to take acknowledgments, then and in that event I direct the president judge of this judicial district to appoint such successor or successors as in his sound judgment he may deem proper.

"Item. All the rest and residue of my estate I give, devise and bequeath to the city of Winchester, Virginia, to be accumulated by said city for the period of twenty years, the income arising from said residue estate to be expended and laid out in said city by the erection of school houses for the education of the poor."

The appraiser appraised the lands situated in Virginia and West Virginia for the collateral tax. He also assessed the cash value of the bequests made to different persons in the nature of scholarships. The executors appealed from the appraisement, and the court, in an opinion by ARCHBALD, P.J., with some modifications as to amounts, confirmed the appraisement.

Errors assigned were (4) the decree fixing the appraisement; (9) in not dismissing the appraisement made by the commonwealth.

The decree is reversed and the appraisement directed to be readjusted on the principles herein stated.

H. W. Palmer, with him Lemuel Amerman, for appellants. -- The real estate in Virginia and West Virginia is not subject to collateral inheritance tax: Com. v. Coleman, 52 Pa. 468; Hale's Est., 161 Pa. 181; Hoyt v. Commissioners of Taxes, 23 N.Y. 228.

The expenses of boys and girls at school are not subject to tax: Cottage Street Church v. Kendall, 121 Mass. 528; Whitsitt v. Presbyterian Church, 110 Ill. 125; Act of May 6, 1887, P.L. 79.

The collateral inheritance tax is not payable now: Act of May 6, 1887, P.L. 79.

James H. Torrey and Holmes Conrad, with them L. A. Watres, for appellee. -- The value of the real estate in Virginia and West Virginia, is subject to...