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OBICI TRUST. (09/30/57)

September 30, 1957

OBICI TRUST.


Appeal, No. 145, Jan. T., 1957, from decree of Orphans' Court of Lackawanna County, 1948, No. 1197, in case of charitable trust of Amedeo Obici. Decree affirmed with a procedendo.

COUNSEL

Bernard G. Segal, with him Edward W. Mullinix, James W. Scanlon, William A. Schnader and Schnader, Harrison, Segal & Lewis, for appellant.

Andrew Hourigan, Jr., with him John R. Lenahan, White, Rowlands & Hourigan and Morgan, Lewis & Bockius, for appellees.

M. Paul Smith, with him J. Brooke Aker, and Smith, Cahall & Aker, for interested party, under Rule 46.

Before Jones, C.j., Chidsey, Musmanno, Arnold and Cohen, JJ.

Author: Chidsey

[ 390 Pa. Page 181]

OPINION BY MR. JUSTICE CHIDSEY

This declaratory judgment proceeding concerns the interpretation of two paragraphs of an instrument creating a charitable trust executed by Amedeo Obici,

[ 390 Pa. Page 182]

    founder of the Planters Nut and Chocolate Company, on January 13, 1945 with two amendments made thereto that same year and a third amendment made in 1946. By a stipulation of counsel dated June 11, 1956 the conclusions of the court as to the Charitable Trust*fn1 thus created were also to apply to similarly worded paragraphs of instruments executed by the settlor on the same day creating the so-called Friends and Relatives Trust and the so-called Angeline Obici Sangiuliano Trust,*fn2

After setting forth the duties and powers of the "Corporate Trustee" (The Third National Bank and Trust Company ofScranton, Pa.), the "Individual Trustee or Trustees", and the "Trustees" (meaning both the corporate and individual trustees), the last two paragraphs preceding the attestation clause of the instrument appear, as amended:*fn3

"18. Upon the death of the Settlor, Mario Peruzzi shall act as co-trustee with the Corporate Trustee, and upon the death of Mario Peruzzi, Frank A. English, R. S. Lisman, C. H. Murden and Joseph Rocereto shall act as co-trustees with the Corporate Trustee.

"If any of the individual co-trustees herein shall die, resign, refuse to act, be declared mentally incompetent or remove themselves or be removed for any cause, then the surviving individual co-trustees shall

[ 390 Pa. Page 183]

    appoint another individual or individuals to act as successor co-trustee so that at no time shall there be less than four individuals acting as co-trustees. The successor individual co-trustee so appointed shall not be related to any of the other co-trustees then acting.

"The individual Trustees shall not be required at any time to file a bond in order to qualify or to act."

"19. In the event of a disagreement between the Corporate Trustee and the Individual Trustee or Trustees, the decision of the Individual Trustee or Trustees shall be conclusive and binding. In the event of a disagreement among the individual Trustees, the decision of Joseph Rocereto shall be conclusive and binding. In the event Joseph Rocereto is not a co-trustee at the time, the decision of a majority of the Individual Trustees shall be conclusive and binding."

Upon the death of the settlor on May 21, 1947, Mario Peruzzi, settlor's brother-in-law, became the individual trustee as designated by paragraph 18. When Peruzzi died on December 10, 1955, C. H. Murden, one of the four named to succeed him, had predeceased Peruzzi, and this gives rise to the immediate controversy.

Frank A. English and R. J. Lisman, appellees here, had been, along with C. H. Murden, long time managerial employes of the Planters Nut and Chocolate Company. They appointed P. J. McGough, another employe of Planters, to fill the vacancy created by Murden's death. It is their contention that they were empowered to do so by paragraph 18 of the trust instrument, as a majority of the "surviving individual co-trustees", and under the prevailing rule in the law of charitable trusts that the decision of a majority of the trustees is binding, Restatement of Trusts, ยง 383. They are joined in this contention by the Louise Obici Memorial Hospital, as an interested party under our Rule

[ 390 Pa. Page 18446]

, which advances the theory that the settlor intended control of the trust to remain with what in effect would be a management group of the Planters Nut and Chocolate Company, rather than intending ultimate control to reside in appellant alone.

The appellant, Joseph Rocereto, related to settlor by marriage, appointed Elizabeth Obici Peruzzi, sister of the settlor and widow of Mario Peruzzi, to fill the vacancy created by C. H. Murden's death, in conflict with appellee's selection of McGough. He contends that he was empowered to do so because there was a "disagreement" among the individual trustees, and in such a case the section of paragraph 19 which states: "... In the event of a disagreement among the individual Trustees, the decision of Joseph Rocereto shall be conclusive and binding. ...", governs. His contention is that settlor intended that first an individual (Peruzzi) in whom he had complete confidence should control the trust, and, then, that appellant, a personal, not a "business" associate of settlor, should have a curb over the "management team".

The Corporate Trustee, The Third National Bank of Scranton, receiving "appointments" to fill the vacant trusteeship from both appellant and appellees, notified appellees by letter dated March 15, 1956, that it deemed Elizabeth Obici Peruzzi, ...


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