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PENGELLY ESTATE (06/26/53)

June 26, 1953

PENGELLY ESTATE


Appeal, No. 67, Jan. T., 1953, from decree of Orphans' Court of Berks County, No. 35,622, in Estate of James H. Pengelly, deceased. Decree reversed.

COUNSEL

Charles H. Weidner, with him Stevens & Lee, for appellant.

Franklin E. Kantner, with him Llewellyn R. Bingaman and Moss, Rieser & Bingaman, for appellees.

Before Stern, C.j., Stearne, Jones, Bell, Chidsey, Musmanno and Arnold, JJ.

Author: Chidsey

[ 374 Pa. Page 360]

OPINION BY MR. JUSTICE CHIDSEY

The question here involved is the validity of an instrument purporting to create an inter vivos trust.

James H. Pengelly died testate on February 28, 1947 survived by his wife, Katie W. Pengelly. His will, dated December 13, 1945, revoked all prior wills and was duly probated March 4, 1947. Letters testamentary were issued to F. Edwin Titlow who also was named trustee under a "Living Trust Agreement" dated October 22, 1943, the subject matter of this litigation.

The will gave nothing to the widow who elected to take against it. No children were born of the marriage. Following her election to take against the will, the widow petitioned for and the court granted a citation directed to all parties in interest to show cause why the inter vivos trust instrument, in which she was not included as a beneficiary, should not be declared null and void as to her and why the property held by Titlow as trustee thereunder should not be decreed to be assets of the decedent's estate and distributed to the persons entitled to the estate. After hearing, the lower court entered a final decree dismissing the petition and citation. The widow, Katie W. Pengelly, appeals therefrom.

Appellant contends that the trust instrument was testamentary and illusory in character, that it created nothing more than an agency relationship between the

[ 374 Pa. Page 361]

    decedent and the trustee, that it was not made in good faith but for the purpose of defeating appellant's rights in the property transferred by the agreement, and for these reasons ineffective to bar her rights as decedent's widow.

It appeared from the testimony taken that decedent and his wife, the appellant, separated in 1908; that at or about the time of this separation an acquaintance and friendship sprang up and grew into an intimacy between the decedent and Miss Katharine Bumersbach that culminated in the latter becoming the decedent's housekeeper in a home provided by the decedent, and where he was living at the time of his death. The two took trips to the seashore together and went on visits to Miss Bumersbach's relatives. Appellant claimed that the relationship was meretricious.

The trust instrument transferred to Titlow as trustee certain bonds and stocks listed therein and provided in paragraph 1 as follows: "1. The Trustee shall hold, manage, invest and administer the said fund and all additions which may from time to time be made thereto and be held by the Trustee on account of the trust hereby created and all reinvestments and substitutions thereof, and shall have power and authority, with the approval of the Settlor during his lifetime, and thereafter at his, the said Trustee's sole and uncontrolled discretion, to alter, vary, change, transfer and retransfer investments and reinvestments from time to time without being restricted to what are known as legal investments for Trustees under the Laws of the Commonwealth of Pennsylvania, the Settlor hereby expressly authorizing the said Trustee, with the approval of ...


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