Appeal, No. 187, Jan. T., 1949, from decree of Court of Common Pleas No. 6 of Philadelphia County, March T., 1948, in Equity, No. 5545, in case of Winthrop Lee Biddle v. Mary V. Biddle et al. Decree affirmed.
Harry J. Gerber, with him William M. Gerber, for appellant.
John Kennedy Ewing, 3rd, with him Saul, Ewing, Remick & saul, for appellees.
Before Maxey, C.j., Drew, Linn, Stern, Patterson, Stearne and Jones, JJ.
OPINION BY MR. JUSTICE ALLEN M. STEARNE
This is an appeal from a final decree of a court of common pleas, in equity, dismissing a bill by a divorced husband (plaintiff) against his wife and her inter vivos trustee (defendants), seeking to have plaintiff's assignment of his contingent interest in his father's estate, absolute on its face, declared to be merely collateral security for a loan.
Winthrop Lee Biddle, plaintiff, and his wife, Mary V. Biddle, a defendant, were married April 21, 1920. They have two children: Edward, born in 1921 and Dorothy, born in 1928. The husband and wife lived together until 1941, when they were divorced.
The wife inherited an estate from her deceased mother. On June 20, 1931 she made a deed of trust to the Provident Trust Company, whereunder she transferred certain securities in trust to pay her the net income for life with remainder as she should appoint by will; on failure to appoint, the corpus passed to her husband (plaintiff) and their children (or their issue). By the fourth clause of the deed she was enabled to add additional assets to the trust. Under the seventh clause she reserved the right to revoke or amend the deed to the extent of $10,000. While neither the book nor actual value of the trust assets appear in the evidence, an examination of the schedule of assets attached to the deed discloses an estate of comparatively modest dimensions.
The husband had a one-third contingent interest under the will of his deceased father. The contingency was that plaintiff should survive his mother in order to take. The mother was living at the date of the assignment. According to the finding of the trial judge, the
book value of the contingent interest of plaintiff in his father's estate in 1937 was $34,000; with an actual value between $11,333 and $20,063, and its then immediate sale value, as a contingent interest, "worth much less".
In late December 1936 and early January 1937, unpaid bills owed by plaintiff amounted to $1,500. He attempted to borrow this sum from money lenders, upon the collateral security of his contingent interest in his father's estate. His efforts proved unsuccessful. In January, 1937, plaintiff consulted Lewis W. Van Meter, who was then a trust officer of the Provident Trust Company, and an intimate friend of both the husband and wife. Mr. Van Meter testified that after reviewing the situation, he told plaintiff that if he borrowed from professional money lenders, with his contingent interest pledged as collateral, he would likely lose the interest. The witness suggested to plaintiff that the wife could withdraw $1,500 from her trust (as she was authorized to do) and pay it to the husband, whereupon the plaintiff could assign his contingent interest to the wife's trustee as part of the trust. The plaintiff agreed and directed Mr. Van Meter to submit the proposition to the wife. The scheme was presented to the wife to which she assented. Mr. Van Meter testified that he explained to the plaintiff that the assignment was to be an absolute one, and that the plaintiff so understood. As the assigned interest was contingent, which would be extinguished if plaintiff predeceased his mother, it was agreed that the plaintiff should insure his life for $1,500, and assign the policy to the ...