Opinion
January 8, 1947.
January 28, 1947.
Trustees — Appointment — Harmony among co-trustees — Appointment of judge of court of common pleas — Petition of surviving trustees — Provisions of will.
On appeal by a life tenant from a decree appointing trustees to fill vacancies caused by the death of two of four trustees named by testator, in which it appeared that the court had refused to appoint the appellant as one of the trustees because to have done so would have created disharmony among the trustees; that it had refused to appoint a judge of the court of common pleas because litigation involving the trust might eventually come before him as a judge; and that it had appointed as a trustee, one who had been suggested by the surviving trustees and not by the beneficiaries because the will expressly provided that appointments to trustee should be made upon petition of the surviving trustees; it was Held that the decree should be affirmed.
Argued January 8, 1947.
Before MAXEY, C. J., DREW, LINN, STERN, PATTERSON, STEARNE and JONES, JJ.
Appeal, No. 20, Jan. T., 1947, from decree of O. C., Schuylkill Co., in Estate of Joseph Henry Zerbey, deceased. Decree affirmed.
Proceeding upon petitions suggesting appointments of successor trustees.
The facts are stated in the opinion, by GANGLOFF, P. J., of the court below, as follows:
Elizabeth Zerbey Martz, a life tenant, filed exceptions to the appointment of Frances Zerbey Braun, a life tenant, and Harry C. Hoffman, Editor of the Pottsville Republican, as trustees under the will of Joseph Henry Zerbey, deceased, to fill the vacancies caused by the death of two of the four trustees appointed by the testator. The exceptant does not contend that the appointees are not qualified to fill the office. Her contention is (a) that there was an abuse of discretion in appointing others than her own nominees, namely, Hon. Cyrus M. Palmer and herself and (b) that in the appointment of Harry C. Hoffman an error of law was committed.
The exceptant is one of three surviving children of the testator whose respective interests are limited to a life tenancy. There are four grandchildren who are both life tenants and remaindermen. Then there is the life tenant of the $6,000 trust. None of these other life tenants join in the exceptions, nor do any of the remaindermen. What is more, two of the three surviving children of the testator (the exceptant is the third of these) specifically state upon the record, through their counsel, that they have no desire to join in the exceptions. The exceptant therefore stands alone in her contentions mentioned above.
In appointing the two trustees above named we also set forth our reasons therefor, fully realizing that in following the latter course we undertook that which is not legally necessary. We also were not unmindful of the fact that in spreading our reasons upon the record we were thereby presenting an opportunity to disappointed parties in interest to question mental processes which need not have been disclosed. That opportunity has been seized. No one can question the right of the exceptant to take advantage of that opportunity. If there was an abuse of discretion or an error of law committed, then indeed, there will be no hesitancy whatever in taking appropriate action.
Our reasons for refusing to appoint the exceptant have been stated and will not be repeated here. In stating these reasons, we did not go into details. Nor was it necessary as a matter of law. We repeat here primarily for emphasis purposes that to appoint the exceptant as a trustee would undoubtedly create disharmony among the trustees. That this is so is in effect admitted by the exceptant. Referring to her former husband as one of the surviving trustees, she, speaking through her counsel, states that "his remaining under the circumstances is intolerable." Of course, the question is not whether one of the surviving trustees should be retained as a trustee. No one has questioned his qualifications. The testator had confidence in him. He is the father of two of the life tenant-remaindermen. He has served as a co-trustee for about ten years. Several accounts have been filed and adjudicated. One is now pending for audit. Thus far no one has raised upon the record any question as to Mr. Martz's qualifications or his conduct as a co-trustee. The exceptant has not brought anything to our attention which was not considered before the appointments to fill the vacancies were made. Therefore, it is just appropriate to say now what was said before, namely, that we should not and will not pursue a course which is not for the best interests of the trusts or which will create disharmony in the board of trustees.
Was there an abuse of discretion in the failure to appoint Honorable Cyrus M. Palmer as a trustee? As in the case of the exceptant, we set down our reasons for refusal to appoint Judge Palmer. The exceptant is represented by eminent counsel; in fact, that can be said in respect of counsel representing the other parties in interest. As a system of government — one of laws rather than of men — ours is the best, viewed from any standpoint, thus far devised by man. That the system here and there does not measure up to unanimous approval is not the fault of the system, but rather the fault of man himself. That system cannot function impartially and justly without the aid of our courts. There and there alone — short of resort to war — are settled those disputes upon which otherwise men cannot agree. That is the American way. The heart of the court is the judge. He hears and determines. He should not voluntarily allow himsef to be placed in a position where, directly or indirectly, he may help to create situations which may result in litigation that eventually must be settled in and by the very court which he judges as a judge. True, a judge may have had professional or social ties before his elevation to the bench which require that he step aside at times and permit some other judge to act in his place. Such situations are generally unavoidable. But in the case at bar we are still holding the other end of the stick. So why create possible embarrassing situations when there is full power here to avoid doing so? It is no answer to say that a judge must deal with embarrassing situations right along. That is true, but it does not follow that more of the same kind of situations should be created when there is no necessity for such action. Reference already has been made to the fact that no one has raised any question as to the qualifications of the two trustees appointed by the court. They admittedly are qualified. Further discussion of the question of abuse of discretion in the failure to appoint Judge PALMER seems unnecessary.
There remains for discussion the remaining contention of the exceptant, namely, that in the appointment of Harry C. Hoffman an error of law was committed. This error, it is contended, lies in the fact that Harry C. Hoffman was nominated by the surviving trustees only; he was not included in the list of nominees submitted by life tenants and remaindermen. Counsel for the exceptant relies mainly upon McCaskey's Estate, 307 Pa. 172.
Clause Twelfth of testator's will, quoted in full in our adjudication of the petitions to fill the vacancies, specifically placed upon the President Judge of the Orphans' Court of Schuylkill County the duty to "appoint any vacancies which may exist by death . . . in the number of my trustees or executors. . . . The said appointment shall be made upon the petition of the surviving trustees or executors or any of them." That the testator had a legal right to direct by whom and in what manner vacancies by death or otherwise were to be filled, there can be no doubt.
The will in this case was prepared under competent legal advice and guidance. Section 56(a) of the Fiduciaries Act of 1917 provides for the filling of vacancies caused by death or otherwise of trustees of trusts created in wills. That the procedure outlined in this section did not meet with the approval of the testator is plainly evidenced by the fact that he directed that a somewhat different procedure be followed. This he had a right to do. Under section 56(a) vacancies are filled "on the application of any party in interest, and with the consent of such continuing . . . trustee or trustees, with notice to all persons interested. . . ." It will be observed that the application or petition must be by "any party or interest" and not by the surviving trustee or trustees. Under the testator's plan the surviving trustees must make the application; not a party in interest. Certainly application and petition are synonymous in this case. Certainly also if, as is contended by counsel for the exceptant, the petition of the surviving trustee is limited to merely reporting vacancies and does not include the right to recommend persons for appointment, then the application by parties in interest must, under section 56(a), also be so limited. But such is not the case, for it is well settled that the authority given by section 56(a) to make application includes also the authority to recommend appointees. Therefore, it seems quite clear that when the testator directed that vacancies shall be filled on petition of the surviving trustees he included, by analogy with "application" under section 56(a), the duty to suggest nominees. He does not say that the court must appoint the persons nominated by the trustees; the final decision as to who is to be appointed lies with the President Judge of the Orphans' Court. So filling of vacancies stems from the petition of the surviving trustees filed under the terms of the will and not from that of the parties in interest.
Notwithstanding the procedure laid down in the will, we permitted all parties in interest who so desired to file petitions for appointment of their own nominees. Due and impartial consideration was given to all of these petitions. In making our selections we pointed out why the best interests of the trusts created in the will would not be served by appointing those who were not appointed. So all parties in interest had their day in court; all had previous notice of who the nominees were, including those mentioned in the petition of the surviving trustees. In fact, the petition of the surviving trustees was the first one to be filed. All of the other petitions were filed later and, of course, all parties in interest had knowledge beforehand of the contents of the petition filed by the surviving trustees. In making our selections we adhered to the rule in McCaskey's Estate, relied upon by the exceptant, as witness what the court there said (page 177): "or if, upon a careful and impartial consideration of those suggested, the court below finds it should not appoint any of them, upon it is cast the duty of selecting either the present appointee or some other person whom it knows is qualified."
In view of what has been said and having in mind that the best interests of the trusts created by the testator will be served and promoted by the appointments as made, the exceptions must be and will be dismissed.
To avoid misunderstanding, we call the attention of counsel for the exceptant to an assertion made in their brief of argument which we feel has no basis in fact. Counsel asserts on page 5 of the brief of argument that the opinion of this court "recognizes that under the will of the testator the trustees have no right or authority to fill vacancies and no authority to make a nomination to the court when vacancies occur." The opinion does recognize that the surviving trustees have no right or authority to fill vacancies, but it does not say that they do not have the right to recommend persons to fill vacancies. Moreover, the decree itself recognizes the right of the surviving trustees to recommend in that the nominees of the surviving trustees were actually appointed.
And Now, May 6, 1946, the exceptions are dismissed and the decree entered March 11, 1946, is now made absolute.
Petitioner, life-tenant, appealed.
James J. Gallagher, with him John B. McGurl, for appellant.
John H. Fertig, with him Ralph M. Bashore, for appellees.
The decree of the court below is affirmed on the opinion of President Judge GANGLOFF; costs to be paid by the appellant.