Appeals, Nos. 223 and 224, March T., 1953, from decree of Orphans' Court of Allegheny County, 1946, No. 4679, in Estate of Lela H. Edwards, deceased. Decree affirmed. Audit of final account of executors. Before Cox, J. Adjudication filed finding that additional gifts were subject to apportionment of estate taxes; exceptions to adjudication sustained; decree entered modifying schedule of distribution, before BOYLE, P.J., Cox and RAHAUSER, JJ., opinion by BOYLE, P.J., dissenting opinion by Cox, J. Residuary legatees, children of H. Edwards, appealed.
Joseph H. Head, with him H. McD. Ritchey, Graydon, Head & Ritchey, Harvey F. Sloan and Griggs, Moreland, Blair & Douglass, for appellants.
James A. Bell, with him Henry A. Morrow, Jr., Thorp, Reed & Armstrong, Robert E. McCormick and Alexander & Green, for appellee.
George D. Lockhart, with him Kirkpatrick, Pomeroy, Lockhart & Johnson, for appellee.
Before Stern, C.j., Stearne, Jones, Bell, Chidsey, Musmanno and Arnold, JJ.
OPINION BY MR. JUSTICE JONES
Mrs. Lela H. Edwards, domiciled in Pittsburgh, died testate leaving to survive her three married daughters, Martha E. Lazear, Lela E. Cook and Katherine E. Nichols, and the widow and children of her deceased son, Harkness. By her will, whe bequeathed her residuary estate to her four children in equal shares. However, in order to produce equality among her four children, she directed that, in distribution of the residue, Katherine and Harkness should each be charged with having received a specified sum of money on account of her specific devises and bequests to them of valuable realty and personalty. Harkness having predeceased his mother, his widow and children took one-fourth and three-fourths, respectively, of his stirpal share of the residue under his mother's will.
The question raised by these appeals is whether the federal estate taxes chargeable to the residuary estate should be apportioned, pursuant to the Act of July 2,
, P.L. 2762,*fn1 among the four equal residuary beneficiaries on the supposition that the charges laid by the will against the residuary shares of Katherine and Harkness were tantamount to specific bequests of equivalent sums of the residue to Martha and Lela although the will contained no declaration to such effect.
It is, of course, well settled that the Apportionment Act of 1937 raises a presumption that, in any testamentary disposition of property subject to federal estate taxes, such taxes are to be apportioned among the pecuniary or specific legatees and devisees according to the proportion their shares bear to the whole of the distributable estate unless a contrary intention is clearly expressed or indicated by the will: Harvey Estate, 350 Pa. 53, 57, 38 A.2d 262. In view of the presumption thus created, the basic question here involved is whether Mrs. Edwards' will contains language clearly indicative of a method of disposing of the residue among the beneficiaries thereof inconsistent with the idea of prorating estate taxes against the recipients of such residuary bequests: see Harvey Estate, supra, at p. 56.
The learned auditing judge, concluding that the testatrix's will did not evidence such an intent, attempted a proration of estate taxes, chargeable to the residue, among the residuary legatees and entered a decree nisi accordingly. The court en banc (the auditing judge dissenting) sustained exceptions to the decree nisi and entered a final decree which awarded to the four beneficial interests in the residue their equal shares, subject to the testamentary charge against the shares of Katherine and Harkness' family, without
resort to the Apportionment Act. From that decree. Katherine and Harkness Edwards, Jr., have appealed.
By Article Three of her will, Mrs. Edwards devised to her daughter Katherine and to Harkness' widow a one-half interest, each, in the testatrix's breeding farm and country estate near Lexington, Kentucky, known as Walnut Hall. She also bequeathed to Katherine and to Harkness' widow by the same Article Three all live stock, crops, equipment and personal property located on Walnut Hall and, respectively, the furniture, furnishings and other similar tangible personal property contained in two specified dwellings at Walnut Hall. In connection with these devises and bequests to Katherine and Harkness' widow, the testatrix provided, in presently material part, by Article Three that, -- "In disposing of my estate, in order to produce equality among my four children... I direct that, by reason of the devises and bequests made by this article of my will the following charges, respectively, shall be made: ... I direct that... the issue of [Harkness Edwards] surviving at the time of my death, per stirpes, shall be charged with having received one hundred twenty-five thousand dollars ($125,000) on account of their share of the residue of my estate.... I direct that [Katherine E. Nichols] shall be charged with having received one hundred twenty-five thousand dollars ($125,000) on account of her share of the residue of my estate..." (Emphasis supplied).
By Article Six, the testatrix disposed of her residuary estate in the following manner: "All the residue and remainder of my estate and property... I dispose of as follows: I devise and bequeath the same to the trustees named in Article Eight hereof in trust to divide the same into the same number of equal shares as the number of my children, Martha E. Lazear, Lela E. Cook, Harkness Edwards and Katherine E. Nichols
who shall be living at the time of my death, provided that, if any of my said children shall be deceased and shall have left issue surviving at the time of my death, the issue of each such deceased child shall be entitled, per stirpes, to the share to which such deceased child would have been entitled, subject to the provisions hereinafter contained, and one of such ...