In re Milton Hershey School Trust
| Decision Date | 18 September 2002 |
| Citation | 807 A.2d 324 |
| Parties | In re MILTON HERSHEY SCHOOL TRUST. Appeal of Milton Hershey School and the Hershey Trust Company, in its Capacity as the Trustee of the Milton Hershey School Trust. |
| Court | Pennsylvania Commonwealth Court |
Jack M. Stover, Harrisburg, for appellants.
Gerald J. Pappert, Harrisburg, for appellee.
Before COLINS, President Judge, McGINLEY, Judge, PELLEGRINI, Judge, LEADBETTER, Judge, and SIMPSON, Judge.
OPINION BY President Judge COLINS.
Before this Court is the appeal of the Hershey Trust Company and Milton Hershey School (collectively, Trust) seeking a stay of the special injunction issued by Senior Judge Warren G. Morgan of the Dauphin County Orphan's Court and the Trust's emergency application for expedited ruling on the merits of Judge Morgan's grant of the special injunction. The preliminary or special injunction prohibits the Trust from entering into any agreement or understanding that would or could commit the Trust to a sale or other disposition of any or all shares of Hershey Foods Corporation held as the corpus of the Milton Hershey School Trust pending the Orphan's Court's disposition of the Pennsylvania Attorney General's petition for citation for rule to show cause why a proposed sale of the Trust's controlling interest in Hershey Foods should not be conditioned upon court approval.
The history of this matter is set forth in detail in Judge Morgan's opinion, which we attach. Briefly, since 1918, the Trust's corpus has consisted primarily of a controlling interest in Hershey Foods, previously known as the Hershey Chocolate Company. The Trust has recently proposed selling its controlling interest in Hershey Foods in an effort to diversify its assets. The Attorney General filed a petition for citation and request for special injunction pursuant to his office's parens patriae powers.1 After a hearing, the Orphan's Court granted the preliminary or special injunction, and the Trust appealed to this Court, seeking a suspension of the injunction pending appeal. The Orphan's Court denied a request for suspension filed simultaneously in that court. In our scheduling order, we raised the issue of our appellate jurisdiction over this matter. Subsequently, the Trust filed an emergency application for an expedited ruling on the merits of the Orphan's Court's preliminary injunction.
The Commonwealth Court's jurisdiction over appeals from the courts of common pleas is set forth in 42 Pa.C.S. § 762. Any appeal that is not, by statute, taken to the Commonwealth Court or to the Supreme Court under 42 Pa.C.S. § 722, falls under the residual jurisdiction of the Superior Court pursuant to 42 Pa. C.S. § 742. The Commonwealth Court has exclusive jurisdiction over final orders of the courts of common pleas in all civil actions or proceedings "[b]y the Commonwealth government, including any officer thereof acting in his official capacity." 42 Pa. C.S § 762(a)(1)(ii). "Proceeding," "[i]ncludes every declaration, petition or other application which may be made to a court under law or usage or under special statutory authority, but the term does not include an action or an appeal." 42 Pa. C.S. § 102. The present matter having been initiated by the Attorney General's Office by the filing of its petition for citation in the Orphan's Court,2 we conclude that this Court has jurisdiction pursuant to 42 Pa.C.S. § 762(a)(1)(ii).
As a separate basis for jurisdiction, in cases where no objection is made to the lack of jurisdiction before the record of proceedings is filed, the failure of an appellee to file an objection to the jurisdiction operates to vest jurisdiction in the appellate court. Pa. R.A.P. 741. Here, the record was filed in this Court on September 10, 2002, and no party has objected to our exercise of jurisdiction.
Because we agree with the Trust that the Court has all of the necessary information and argument necessary to determine the merits of this appeal, we grant the Trust's application for expedited ruling on the merits of the appeal of the preliminary injunction.
The prerequisites for a preliminary injunction are 1) that the injunction is necessary to prevent immediate and irreparable harm that could not be compensated by damages; 2) that greater injury would result by refusing the injunction than by granting it; 3) that the injunction restores the parties to the status quo that existed immediately before the alleged wrong; 4) that the wrong is manifest and the injunction is reasonably suited to abate it; and 5) the applicant's right to relief is clear. City of Philadelphia v. District Council 33, 528 Pa. 355, 598 A.2d 256 (1991). To establish a clear right to relief, the applicant must show that it is likely to succeed on the merits. Id. Our review of a trial court's grant of a preliminary injunction is to determine whether there were any reasonable grounds for the trial court's action, and we will reverse only if no such grounds exist. Id.
The Trust argues that the Attorney General has no authority to prevent an otherwise lawful disposition of trust assets under the guise of protecting the public. This underlying legal issue, while important, is not the focus of our review. Rather we must review the record to determine whether the trial court had the "apparently reasonable grounds" required to support its decision. A review of the record and Judge Morgan's opinion does not immediately convince us no apparently reasonable grounds exist to support the order as one that restores the status quo, prevents the immediate and irreparable harm that would result if the Trust proceeded with a sale of its controlling interest in Hershey Foods before the issues raised by the parties are resolved, and prevents a greater injury than what might result if the injunction were denied.
In ruling on the Attorney General's likelihood of success on the merits, Judge Morgan states that given the existence of the other elements necessary in order to obtain a preliminary injunction, it is sufficient that "substantial legal questions are raised that must be resolved to determine the ultimate rights of the parties." (Orphan's Court opinion, p. 14.) The sale of Hershey Foods, if consummated, would be irreversible and would terminate the entire legal proceedings prior to a resolution of the case on the merits.
Because we cannot conclude that no reasonable grounds exist to support Judge Morgan's order, we must affirm his grant of the preliminary injunction. The Trust's application for stay of the injunction pending appeal is therefore dismissed as moot. In the interest of concluding this matter and to mitigate any harm to the Trust or the public interest that might result from the imposition of the preliminary injunction, we will direct that the Orphan's Court rule on the merits of the controversy expeditiously.
Judge LEAVITT did not participate in this decision.
AND NOW, this 18th day of September 2002, the order of the Court of Common Pleas of Dauphin County, Orphan's Court Division in the above-captioned matter is affirmed. The appellants' application for stay of the trial court's order is dismissed as moot.
The Orphan's Court is directed to rule on the merits of this controversy within 30 days of the entry of this order.
NO. 712, YEAR OF 1963
Sept. 10, 2002
The Hershey Trust Company and the Board of Managers of the Milton Hershey School (the Board of the Trust Company is also the Board of Managers) propose to sell the controlling interest in the Hershey Foods Corporation now held in trust for the School. On August 19, 2002, on the Petition of the Attorney General of the Commonwealth we issued a Citation directing the Trust Company and the Managers to show cause why information regarding the sale process should not be disclosed to this Court and the Attorney General and why a hearing should not be held on any proposed sale. On August 23, 2002, the Attorney General filed a Petition for an ex parte injunction against the same respondents upon which we deferred consideration until a hearing on September 3, 2002, at which all parties appeared and were heard. On September 4, 2002, we issued an Order (with Adjudication to follow) enjoining the respondents from committing to any sale until disposition of the pending Citation.
The issue herein discussed is whether the proof available to this Court supports the injunctive relief granted. We should here note that prior to the hearing on the injunction we advised counsel for both the petitioner and the respondents that we do not view our role in this matter, commencing with this proceeding, as "a passive instrument of the parties"3; that the public interest in the controversy and this Court's inherent plenary powers of supervision over trusts may lead us to add to our consideration of the issues such facts not offered by the parties as might aid our determination; and we particularly referenced, but did not thus limit, judicial notice of adjudicative facts disclosed in the records of this Court in prior proceedings involving the Milton Hershey School Trust wherein the respondents here were the moving parties.
In 1909 Milton S. Hershey and Catherine, his wife, by deed of trust endowed for the benefit of orphan children an institution now known as the Milton Hershey School. In 1918, after Catherine's death, Mr. Hershey added to the trust (hereafter referred to as the School Trust) most of his fortune including the controlling shares of stock of the Hershey Chocolate Company (now Hershey Foods Corporation). The Hershey Trust Company, then owned by Mr. Hershey, was and still is the trustee of the School Trust and, as directed in the trust deed, the members of the Board of Directors of...
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