Opinion
October 2, 1935.
November 25, 1935.
Trusts and trustees — Appointment of substituted trustee — Discretion of court — Old trustee passing out of existence — New trust company.
Where a trust company appointed as trustee and executor under a will has been liquidated and its charter surrendered, it cannot aver that it has merely been reorganized and insist upon a continuation of the trusteeship in its successor as against the petition of the beneficiaries, approved by the orphans' court, that another company be appointed trustee, especially where the trust company substituted by the court was located in the county in which the testator had been domiciled and one of its directors was a person whom testator had named in his will as having his explicit confidence and special knowledge of his investments.
Argued October 2, 1935.
Before FRAZER, C. J., KEPHART, SCHAFFER, MAXEY, DREW and LINN, JJ.
Appeal, No. 261, March T., 1935, by original trustee, from judgment of O. C. Jefferson Co., Aug. T., 1934, No. 82, in the matter of the Trust Estate of David L. Taylor, deceased. Order and decree affirmed.
Petition for substitution of trustee. Before RIMER, J.
The opinion of the Supreme Court states the facts.
Order entered appointing new trustee. Original trustee, trust company, and successor company, as intervening appellant, appealed. Error assigned was order of court.
W. N. Conrad, of Conrad Conrad, for appellant.
Raymond E. Brown and Matthew A. Crawford, for appellees, were not heard.
The Brookville Title and Trust Company appeals from an order of the Orphans' Court of Jefferson County appointing the Farmers and Miners Trust Company of Punxsutawney substituted trustee of the estate of David L. Taylor, deceased. Appellant became trustee and executor under decedent's will and has administered the trust until the present time. The petition for appointment of a new trustee was presented in behalf of the widow and children of decedent, the beneficiaries of the trust, and avers as a ground for the suggested appointment that Brookville Title and Trust Company has ceased to function as a corporation and is now being liquidated by trustees for its creditors and stockholders. Appellant denies it has ceased to function and avers on the contrary that it has merely reorganized with the same personnel of officers, directors and employees under the name of Brookville Bank and Trust Company, and asks that the latter named institution be appointed trustee in its place.
From the record it appears that after the so-called national banking holiday of March, 1933, the Brookville Title and Trust Company was permitted to resume business on a restricted basis, as to its commercial department, by the Department of Banking of Pennsylvania. Subsequently on December 22, 1933, a new corporation, styled Brookville Bank and Trust Company, was formed with the consent of the secretary of banking, consisting of 75% of the shareholders of the former Title and Trust Company together with other interested parties, to take over the assets of the latter company in an amount sufficient to offset liabilities assumed by it, the remaining assets, including slow loans, mortgages, real estate, etc., to be placed in a liquidating trust. On April 10, 1934, the two institutions, the original and its successor, entered into a written agreement, setting forth in detail the method by which the new bank was to take over and assume certain rights and liabilities of the old, and providing specifically, in paragraph twenty-three, as follows: "Old Bank further covenants and agrees that except for the exercise of such powers as are necessary in the winding up of its affairs, it will not engage in the business of banking or exercise any trust powers and will, at the earliest practicable date, effect a surrender and dissolution of its charter by appropriate proceedings at law."
It thus appears that appellant bank is about to pass out of existence and there is a necessity for the appointment of another institution to act as trustee of the Taylor estate. The beneficiaries, by their petition, have not suggested the appointment of the new Brookville Bank and Trust Company as trustee, but on the contrary have indicated a desire to have the trust administered by a different institution. The court below, after full hearing and consideration of the matter, appointed the Farmers and Miners Trust Company of Punxsutawney trustee under the will of decedent, as successor to the Brookville Title and Trust Company. This latter bank, as pointed out in the opinion of the learned judge who heard the case, is located in Jefferson County, which was the county in which testator was domiciled and in which the family home is still maintained. A director of this bank is J. E. Geist, whom testator named in his will as one of the persons having his explicit confidence, together with a special knowledge of his investments.
In these circumstances we find no abuse of discretion in the appointment made by the court below, and, in the absence of such, the order will not be disturbed on appeal.
The order and decree of the court below is affirmed at appellant's costs.