trust by her. The residence was constructed with assets of the trust.
On October 24, 1949, the trustees (plaintiff Moreell, Frank R. S. Kaplan, and Dr. Lawrence Wechsler) unanimously resolved to transfer the Woodland Road Property to plaintiff Moreell in fee simple and free of the trust pursuant to Article VI of the trust instrument. The property was unencumbered. Its cost upon the completion of the residence in 1942 was $ 445,360.66.
On July 5, 1950, the trustees (plaintiff Moreell, Frank R. S. Kaplan, and Dr. Lawrence Wechsler) agreed to pay from the principal of the trust, the bills incurred by plaintiff Moreell for the care, maintenance and upkeep of the property. These payments were made continuously up to the years in question.
Between October 24, 1949 and April 29, 1952 (the period in which she had title to the property), plaintiff Moreell mortgaged the property for an amount not less than $ 90,000.
On April 29, 1952, plaintiff Moreell made a gift of the property to the trust giving as her reason her desire to prevent her husband, Harry K. Anderson, from acquiring any interest in the property. The trustees accepted the property subject to the $ 90,000 mortgage, and agreed to discharge the mortgage by paying off the principal from trust corpus and interest from trust income.
Plaintiff Moreell did not surrender possession of the Woodland Road Property after the deed of gift, but continued to use it exclusively and without limitation as her personal residence and continues to reside therein at the present time. During the years 1955 and 1956, as in the other years, plaintiff Moreell paid no rent. Her continued residence in the property until her death is contemplated. Her use and occupancy of the property is not restricted by any lease or other written agreement.
The property has not produced any income for the trust. The trustees did not regard it as income producing property.
During the period 1952 to 1962 at least $ 93,000 of the trust corpus was expended by the trustees in partial retirement of the mortgage placed upon the property by plaintiff Moreell and for other improvements to the property. (This is in addition to the $ 33,835.17 of trust income expended during the years 1955 through 1956 in issue here.)
In its tax returns for 1958 and 1959 the trust capitalized and took a depreciation deduction for certain improvements. Upon audit these deductions were disallowed.
8. Plaintiff Moreell, acting with the trustees, all nonadverse parties (Paragraph 6 above), could have had the Woodland Road Property reconveyed to her at any time, just as she had procured the distribution of over $ 690,000 of trust corpus to her during the period 1949 through 1962. The trustees did not exercise independent judgment in determining whether distributions should be made. In administering the trust property they acted more as agents of plaintiff Moreell than as trustees.
Distributions of capital were made to plaintiff Moreell upon her request. When a request was made (at least once a year) a meeting was held. While there may have been discussions with respect to the amount of the distribution, a distribution was always made.
The other circumstance under which distributions of corpus were made was when plaintiff Moreell's personal bills had accumulated or she had overdrawn her bank account. In this situation, the trustees would meet specially and declare a corpus distribution to her so that she could meet these obligations.
Investment policy was determined consistent with her personal interests.
During the period 1949 through 1961 the trustees distributed to plaintiff Moreell trust corpus in the amount of at least $ 690,000.
9. During the years 1955 and 1956, plaintiff Moreell personally incurred expenses for the maintenance and care of the Woodland Road Property in the amounts of $ 20,276.95 and $ 13,558.22, respectively. The trustees did not determine which expenditures would be made or in what amounts. The bills were turned over to trustees and were always paid. These expenses were the personal living expenses of plaintiff Moreell.
During the year 1955 the trustees expended $ 20,276.95 of trust income for the care and maintenance of the Woodland Road Property. These were the ordinary noncapital expenditures incident to the maintenance and occupancy of the property. The nature and amount of these expenditures were:
TAXES City and School Taxes $ 3,642.82
Allegheny County Taxes 1,059.52
INTEREST Interest on Mortgage 1,333.13
INSURANCE Louis Wechsler Agency 220.11
UTILITIES Duquesne Light Co. 1,148.17
Peoples Natural Gas Co. 1,271.96
David A. Smith, Treas., 572.94
WATER REPAIRS Weldon & Kelly Co. 928.32
AIR CONDITIONING Paul Heagy 583.31
SANITATION Remo Sanitation Co. 88.00
ELEVATOR Otis Elevator Company 278.25
WINDOW & SHADE Mamaux Awning & Tent Mfg. Co. 84.84
SERVICE Hamilton Shade & Drapery Co. 58.67
Victor Decorating Co. 2,428.50
GARDEN & Consentino Brothers 1,640.50
LANDSCAPING Davey Tree Expert Co. 835.78
SERVICE Bushnell Machinery Co. 100.49
Louis Hahn & Son 91.08
GENERAL REPAIRS Paul Heagy 142.75
Louis Hahn & Son 311.03
Better Built Supply, Inc. 144.19
Bindley Fence & Equipment 108.00
Weston Sales & Service 67.89
Automatic Elec. Sales 63.08
Gateway Plating & Mfg. Co. 22.00
William L. Berndt 511.13
Atlas Theatre Supply Co. 34.34
Raphael Elec. Co. 111.69
Sauer, Inc. 49.28
Weldon & Kelly Co. 361.01
MAINTENANCE & Woodland Road Assn. 188.41
NIGHT WATCHMAN Salary 1,736.25
Employee's Soc. Sec. taxes 30.33
Pa. Employment Comp. Ins. 29.18
TOTAL $ 20,276.95
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