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HENRY ESTATE. (03/17/64)

March 17, 1964

IN RE HENRY ESTATE.


Appeal, No. 99, Jan. T., 1964, from decree of Orphans' Court of Delaware County, Dec. T., 1931, no. 29, in re estate of W. Barklie Henry, deceased. Decree affirmed.

COUNSEL

Albert Blumberg, with him McClenachan, Blumberg & Levy, for guardian and trustee ad litem, appellant.

Maurice Heckscher, with him Robert W. Denious, and Duane, Morris & Heckscher, for appellees.

Before Bell, C.j., Musmanno, Jones, Cohen, Eagen, O'brien and Roberts, JJ.

Author: Bell

[ 413 Pa. Page 480]

OPINION BY MR. CHIEF JUSTICE BELL

Appellant seeks a surcharge against testamentary trustees for losses incurred by them on sales of three securities. The narrow question thus raised involves a construction of the investment powers conferred by the Will of W. Barklie Henry.

Mr. Henry died December 24, 1930, leaving a Will dated January 13, 1913. In his Will and codicils, Henry created a trust for the benefit of his wife and his surviving children, including his daughter, Alice E. Henry von Briesen*fn1 and her issue. That trust still subsists.

On February 26, 1963, the trustees, Barklie McKee Henry and Girard Trust Corn Exchange Bank, filed a partial account. The Orphan's Court appointed appellant Albert Blumberg, Esq. as guardian ad litem for minors, and trustee ad litem for unascertained persons, who presently were or who might thereafter be interested in the trust. Blumberg filed exceptions to small losses claimed in the Account on securities which the trustees purchased and thereafter sold, namely, a $1,000 Pennsylvania Turnpike Bond due 2000-1993; a $1,000 U.S. Treasury Bond due 1966; and 10 shares of General Motors Corporation common stock. All of these were legal investments under the Fiduciaries Investment Act of May 26, 1949, P.L. 1828, 20 P.S. ยง 821.1 et seq., but were not specifically authorized by the Will.*fn2

Blumberg's exceptions to the three aforesaid losses were dismissed by the Orphans' Court; hence this appeal.

[ 413 Pa. Page 481]

The success or failure of the appeal depends, we repeat, on a proper construction of the investment powers given by the Will. Testator in his Will pertinently provided as follows:

"Item (4): All the rest, residue and remainder of my estate, real and personal, I give, devise and bequeath unto the Girard Trust Company,*fn3 ... In Trust to invest and keep the same invested, not limiting my said Trustee to the investments limited by law as legal investments for such Trustee, but granting unto it a broader discretion as is hereinafter more particularly set forth*fn4 and relieving it from any liability by reason of any loss or depreciation in any such investments made in its discretion, ...

"Item (5): ... My Trustee above named, or its successors, may invest my said estate in first mortgages on real estate, such mortgages not to be in excess of sixty per cent (60%) of the assessed valuation of the property loaned upon, and at a rate of interest not lower than four and four-tenths (4-4/10%); in first mortgage, general mortgage, and consolidated mortgage bonds of Standard Railroad Companies; in car trusts of private Coal Companies operating over the Pennsylvania Railroad lines in which latter case twenty-five per cent (25%) shall have been paid in such, in first mortgage bonds of Coal Companies where the aggregate bonded issue is not at excessive figures per acre in the judgment of my Trustee, and where there is a sinking fund provision of ten cents ($.10) per ton; in bonds of the United States Steel ...


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