Appeals, Nos. 355 and 362, Jan. T., 1962, from decree of Orphans' Court of Philadelphia County, No. 2482 of 1951, in re trust of Joseph Binenstock, settlor. Decree reversed; reargument refused April 30, 1963.
Austin M. Lee, with him Frank F. Truscott, for appellant.
Perch P. Hankin, and Hankin, Hankin & Shanken, for appellant.
Harry Shapiro, Irwin Edward Robinson, and Shapiro, Rosenfeld, Stalberg & Cook, for appellants.
Robert J. Spiegel, with him Earl Jay Gratz, for appellee.
Cuthbert H. Latta, for trustees, appellees.
Before Bell, C.j., Musmanno, Jones, Cohen, Eagen, O'brien and Keim, JJ.
OPINION BY MR. JUSTICE COHEN
In 1943 The Commonwealth of Pennsylvania instituted proceedings in the Court of Common Pleas No. 1 of Philadelphia County against Joseph Binenstock for the escheat of ownerless funds allegedly in his possession. While this litigation was still pending, Binenstock in 1947 created for the benefit of his four daughters and their issue an inter vivos trust consisting of all the capital stock of J. A. Dougherty's Sons, Inc., Distillers (Dougherty). The Commonwealth in 1949 finally obtained a judgment against Binenstock in the amount of $864,924.01 which was affirmed by this Court.*fn1
Because the Commonwealth threatened to take action to set aside the trust as a fraudulent conveyance, an agreement was entered into in 1951 between the Commonwealth, Binenstock, and the trustees - approved by the orphans' court - whereby the trustees agreed not to convey any trust assets without the Commonwealth's consent so long as any indebtedness remained, "unless otherwise ordered and directed by the final judgment or decree of a court of competent jurisdiction." In return, the Commonwealth reduced its claim against Binenstock to $756,000, payment to be made in thirty-five installments' and agreed not to proceed against the trust so long as the payments were made.
Binenstock eventually defaulted on the payments and in October 1961 the Commonwealth brought an action in the common pleas court to set aside the trust as a fraudulent conveyance alleging that $465,000 was still due from Binenstock. The trustees filed preliminary objections to the complaint stating that the orphans' ...