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BABCOCK ESTATE (06/28/54)

June 28, 1954

BABCOCK ESTATE


Appeals, Nos. 82, 83 and 84, March T., 1954, from decree of Orphans' Court of Allegheny County, 1948, No. 4198, in Estate of Edward V. Babcock, deceased. Decree reversed. Audit of first and partial account of executors. Before BOYLE, P.J. Adjudication filed finding that election of widow to take against will diminished in part interests under will; exceptions to adjudication dismissed and final decree entered, before BOYLE, P.J., COX and RAHAUSER, JJ., opinion by BOYLE, P.J., dissenting opinion by COX, J. Trustee and sons of decedent appealed.

COUNSEL

William H. Eckert and Fredric L. Clark, with them Carl Cherin and Smith, Buchanan, Ingersoll, Rodewald & Eckert, Grover C. Ladner, Harvey A. Miller, Miller & Miller and Clark, Ladner, Fortenbaugh & Young, for appellants.

Paul Kern Hirsch, with him H. Fred Mercer, C. John Tillman, Harry E. McWhinney and Robert W. McWhinney, for appellees.

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

Author: Jones

[ 378 Pa. Page 458]

OPINION BY MR. JUSTICE JONES

This controversy is concerned with the effect of a widow's election against her husband's will upon the quantum of the shares in his residuary estate bequeathed to beneficiaries other than herself. The law in such regard is too well settled to require extended discussion. It is rather the manner in which the learned Court below applied the law, in assumed effectuation of what it apprehended to be the testator's overriding intent, which these appeals bring here for review.

By Article One of his will, Edward V. Babcock, the decedent, devised and bequeathed to his wife, Mary, absolutely, his residence property and all his household furnishings and tangibles. By Article Two, he devised and bequeathed all of the residue and remainder of his property to his trustees to divide the same into twenty-four equal parts which he then disposed of in consecutively numbered sections of Article Two. By Section 1, he gave eight of such parts to his trustees in trust to secure an annual income, of guaranteed amount, to his wife for life with directions to his trustees to divide the corpus, after his wife's death, into two equal shares, one of which was to be added to a trust fund under Section 2 for his son, Fred C. Babcock,

[ 378 Pa. Page 459]

    and the other share to be added to a similar trust fund under Section 3 for his son, Edward Vose Babcock, Jr. By Section 2, the testator allocated three parts to his son, Fred (one-half outright and one-half to his trust), and by Section 3, he allocated two parts to his son, Edward V., Jr., (one-half outright and one-half to his trust). By Section 4, he gave to his nephew, Robert P. Babcock, three parts, absolutely. By succeeding sections, he divided the remaining eight of the twenty-four parts of the residue among beneficiaries, not of his blood, as follows, -- one part each to five named employees, two parts to charities to be selected by his trustees and the remaining part to such of his household servants, company employees and personal friends as the trustees, in their uncontrolled discretion, might select.

As already indicated, Mrs. Babcock exercised her right under Section 8 of the Wills Act of 1947, P.L. 89 (20 PS ยง 180.8), by electing to take against her husband's will and thereby became entitled to one-third of the net value of her husband's entire estate, absolutely.

The testator, in obvious recognition of his widow's paramount legal right in the premises and of the possibility of her exercising it, provided in Article Two, Section 1 (where he set up the trust of 8/24ths of his residuary estate for his wife for life with remainder to their sons), that, -- "If my said wife shall elect to take against this will, all of the provisions thereof for her benefit shall be thereby cancelled and annulled, and the provisions of this will with respect to all property except that thus taken by my wife shall be carried out in the same manner as if she had died immediately after my death." He also provided in the same Article and Section that, -- "If my wife, Mary A. Babcock, shall die during my lifetime, the property

[ 378 Pa. Page 460]

    hereinbefore devised and bequeathed in trust for her under this Section 1 of this Article Two of my will shall be disposed of as provided in said Section as though my said wife had died immediately after my death."

In an account filed, the executors took credit for a distribution of income made by them to beneficiaries under the will on the basis of a division of the residue (after deduction of the widow's 1/3rd) into twenty-four parts. Some of the employee-beneficiaries filed exceptions to the account, contending that the effect given by the executors to the widow's election improperly reduced their respective shares from 1/24th to 1/36th each. The exceptants argued that "when the widow filed her election she walked out of the will taking with her the property representing the remainders which her sons would have received had she not elected to take against the will." They contended that their fractional interests of 1/24th each in the entire residue of the estate are not to be diminished by reason of the widow's election. The auditing judge stated the problem, as he saw it, as follows, -- "The question thus presented by these facts is whether the widow, by electing to take against the will, extinguished the remainders provided for her two sons in Section 1 of Article Two or whether by her election the remainders of the sons in the trust are accelerated with the right in the sons to be made whole out of the 2/3rds of the estate which remains after the widow takes 1/3rd out-right by reason of her election."

The learned auditing judge, having adopted the contention of the exceptants to the account, held that "The remainders of the decedent's sons in the 8/24ths of the estate bequeathed in trust under Section 1 of Article Two were extinguished by the widow's election to take against the will." A decree of distribution was

[ 378 Pa. Page 461]

    accordingly entered which entirely eliminated the 8/24ths interest in trust under Article Two, Section 1, from any participation in the distribution of the testator's residuary estate. The effect of the auditing judge's action was to reduce to sixteen the number of equal parts into which he divided the remaining 2/3rds of the residuary estate after the widow's 1/3rd had been deducted. Thus, by the decree of distribution, the court awarded to the exceptants, at the manifest expense of the testator's sons and their families, the equivalent, in amount, of a 1/24th, each, of the net value of the whole of the decedent's estate before deduction of the widow's 1/3rd. The trustees under the will and the testator's sons separately excepted to the decree of distribution. After argument, the court en banc (one judge dissenting) dismissed the exceptions in a final decree from which the trustees and the testator's sons have brought these appeals.

There is nothing in the testator's will to warrant the slightest inference that he intended to cancel or annual his sons' remainder interests in the truth fund for his widow for life upon her electing to take against his will. On the contrary, his plain and unambiguous language explicitly confirms what the law independently declares as the effect of the widow's election. We agree with the pertinent observation of the dissenting judge below that, "It is not necessary in construing the will of Edward V. Babcock, deceased, to speculate as to the testamentary disposition he intended to make of his estate if his wife should elect to take against his will." When the words which the testator employed are given their usual and ordinary meaning, they clearly and unmistakably express his testamentary intent.

The law as to the effect of a widow's election to take against her husband's will is not open to dispute.

[ 378 Pa. Page 462]

In Disston's Estate, 257 Pa. 537, 541, 101 A. 804, it was said for this court that "The relevant rules of law are well settled with us. In Ferguson's Est., 138 Pa. 208, 219, speaking by Mr. Justice MITCHELL, we state the cardinal principle thus: 'Devises or bequests, subordinate to a life estate in the widow and contingent upon her death, or payment of which is postponed until then, become presently payable upon her election to take under the intestate laws; as to its effect upon all claims under the will, her election is equivalent to her death; this is the general rule, and if there are any exceptions, they must depend on the expression or unavoidable implication of a contrary intent of the testator.'" See also Estate of Vance, 141 Pa. 201, 213, 21 A. 643.

To the foregoing must be added that the share which a widow takes of her husband's estate under the intestate law by virtue of an election automatically reduces pro tanto the residue available for disposition according to the will. In Schmick Estate, 349 Pa. 65, 71, 36 A.2d 305, where the testator left but one child and his widow elected to take against his will, Mr. Justice STEARNE succinctly summarized as follows: "When his widow elected to take against the will, and received her one-half share under the intestate law, the value of this estate was reduced in exactly that proportion. There was an acceleration of the remainders. The balance in the estate must be held and distributed as directed by the will."

What the law alone would have ordained in the circumstances of the instant case, the testator intended his will to effectuate. Fully cognizant, as he was bound to be (Estate of Vance, supra, at p. 209), of his wife's paramount right to take a third of his estate outright regardless of his will, the testator provided in Article Two, Section 1, in connection with the trust

[ 378 Pa. Page 463]

    for his wife for life, "If my said wife shall elect to take against this will, all of the provisions thereof for her benefit shall be thereby cancelled and annulled...." Among the provisions for her benefit were the devise and bequest of the testator's residence property and furnishings by Article One and the right to a guaranteed minimum income of $20,000 for her life from the trust estate created in Section 1 of Article Two. Nowhere did the testator evidence any intent that his sons' remainders in the trust estate, created by Section 1 of Article Two, were to be cancelled and annulled if his wife elected to take against his will. Had the testator intended otherwise, he would have plainly said so just as he did provide for the cancellation and annulment of the testamentary provisions for his wife's benefit.

Having thus directed, in the event of his wife's electing to take against his will, for the cancellation and annulment of no more than the testamentary provisions for her benefit, the testator immediately went on to direct that "the provisions of this will with respect to all property except that thus taken by my wife shall be carried out in the same manner as if she had died immediately after my death." What the widow had thus "taken" by her election was 1/3rd of the testator's entire estate. Consequently, "all property" except the widow's third was the 2/3rds residue of the entire estate as to which the provisions of the will were to be carried out "in the same manner", i.e., by a division into twenty-four equal parts, as if Mrs. Babcock had died immediately after her husband's death. That necessarily means that the vesting, in possession and employment, of the remainders in the trust estate under Section 1 of Article Two was to be accelerated to the date of the widow's election which was the "equivalent of her death."

[ 378 Pa. Page 464]

The provision which we have just been considering is a part of Section 1 of Article Two which, as we have seen, is concerned solely with the trust fund for the benefit of the testator's wife for life with remainder to their sons. In this same Article and Section of the will, the testator further provided that, if his wife should predecease him, the property "devised and bequeathed in trust for her under this Section 1 of Article Two... shall be disposed of as provided in said Section as though my said wife had died immediately after my death." The testator could hardly have more plainly indicated his intention that his sons' remainder interests in the trust under Section 1 of Article Two were to be unaffected either by his wife's death or by her election to take against his will save that in the latter event the remainders would be accelerated and diminished by one-third of their amount otherwise.

The widow's election did not, as the auditing judge mistakenly conceived, operate to reduce the twenty-fourth interests in the residue, under the testator's will, to thirty-sixths. The beneficial interests have at all times been in twenty-fourths. The only differences occasioned by the widow's election was that the fund in which the proportionate interests in the residue would share was one-third less than the testator's entire net estate. In other words, the proportionate interests in the residue remained the same after the widow's election, but the fund for distribution among such interests was less. That is no more than frequently happens when a widow elects to take her share in her husband's estate under the intestate law instead of taking under his will and furnishes no justification for arbitrarily disregarding the testator's provisions in the event his wife should elect to take against his will. Such provisions are valid and are to

[ 378 Pa. Page 465]

    be enforced as written: Houston Estate, 371 Pa. 396, 398-399, 89 A.2d 525.

The contentions of the appellees are fallacious and serve to demonstrate the error in the auditing judge's reasoning which they endeavor to support. For one example from many, the appellees assert that "when the wife elected to take her 1/3rd part of the estate outright, she took the trust res, and the trust and the remainders dependent thereon were extinguished." That is what the auditing judge similarly concluded. But, the widow took no specific property nor the shares of any specific testamentary beneficiaries. She took one-third of the testator's entire estate. There is no rational basis for deducing that, by her election, she affected the fractional interest of any particular beneficiary under the will other than as she affected all of such interests by reducing the fund for distribution among them.

The decree is reversed at the appellees' costs and the record remanded for the entry of a decree in ...


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