Appeals, Nos. 188, 189, 190, and 191, March T., 1956, from decree of Orphans' Court of Allegheny County, No. 4005 of 1940, in re estate of D. Herbert Hostetter. Decree affirmed.
Frank W. Ittel, with him Charles W. Dithrich and Reed, Smith, Shaw & McClay, for appellants.
Francis P. Anton, for appellee.
Before Jones, C.j., Bell, Chidsey, Musmanno, Arnold, Jones and Cohen, JJ.
OPINION BY MR. JUSTICE MUSMANNO
On September 28, 1924, D. Herbert Hostetter of "Hostetter's Stomachic Bitters" fame, died in Pittsburgh, leaving a will which created a spendthrift trust of the residue of his estate for the benefit of his widow, children, and grandchildren, the trust to continue until the death of the last survivor of the named beneficiaries living at the time of his death, the principal then to be distributed among the surviving lineal descendants.
Included in the assets of the residuary estate were 894 shares of stock of the Hostetter Company, originally inventoried at $223,500 ( $250 per share) and later increased to $321,840 ( $360 per share), in the Executors' First and Final Account, to conform to the transfer inheritance tax appraisal made by the Commonwealth of Pennsylvania. Under a decree of distribution entered June 3, 1926, the shares, inter alia, were awarded to the Trustees at the increased value.
The stock represented about 8 1/4% of the principal of the trust estate, whose total value approximated $3,900,000.
On February 15, 1933, the trustees exchanged the stock for a parcel of improved real estate belonging to the Hostetter Company. The buildings on this land, located at the Point in Pittsburgh, were razed in September, 1936 because of irreparable flood damage, and the carrying value of the property was reduced to $264,690.22. The land was then commercially used as a parking lot until May 1, 1951, when, by reason of its choice location in the "Golden Triangle," it was condemned under the power of eminent domain by the Urban Redevelopment Authority of Pittsburgh for the Point Park Development Project. On June 16, 1954, the Trustees received $125,000 in payment of the condemned property. Prior to the condemnation, the taxes on this property amounted to $35,084.45 which amount was paid for by income derived from other assets of the trust estate.
When the Seventh and Partial Account (filed August 6, 1954) of the Fidelity Trust Company and Helen Hostetter Griffiths, Surviving Trustees, came before the Orphans' Court of Allegheny County for audit, it was the position of the income beneficiaries that the $125,000 received by the trustees for the Point property should be apportioned between income and principal and that they (the life tenants) were entitled to recoupment in the sum of $35,084.45, for taxes paid on that property. In a stipulation entered into by and between the attorneys for the income beneficiaries, the attorneys for the surviving trustees, and the trustee and guardian ad litem, it was agreed ...