Appeal from decree of Orphans' Court of Philadelphia County, April T., 1914, No. 116, in re estate of Michael Ehret, deceased.
Philip A. Bregy, with him Herbert Bass, and MacCoy, Evans & Lewis, for appellant.
Harry Polish, guardian and trustee ad litem, for appellee.
Bell, C. J., Musmanno, Jones, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Chief Justice Bell. Mr. Justice Eagen concurs in the result. Mr. Justice Cohen took no part in the consideration or decision of this case. Concurring Opinion by Mr. Justice Roberts. Mr. Justice Jones joins in this concurring opinion.
This is an appeal by Provident National Bank, Trustee, from the Decree of the Orphans' Court of Philadelphia County refusing to allow it interim compensation on principal.
In lieu of evidence, the facts were stipulated*fn1 and submitted to this Court as a statement pursuant to Supreme Court Rule 53.
Michael Ehret died February 17, 1913, leaving a will and codicils which were duly probated. In Item Seventh of his will he gave all his real estate (subject to his widow's life estate in one-third thereof) and two-thirds of his residuary personal estate to his trustees, to hold in trust until the expiration of twenty-one years after the death of his last surviving child. The trustees were directed to pay the income to his children and to the descendants of his dead children per stirpes who were living at each distribution date, and upon expiration of the trust to pay the principal to his then living descendants, per stirpes. These provisions were subject to Item Ninth, in which testator gave each of his children a power to appoint by will his or her stirpal share of income and principal among his or her issue. Factually, the trust will continue until July 15, 1985 -- twenty-one years after the death of the last survivor of testator's children.
On December 12, 1919, Land Title Bank & Trust Company (now Provident National Bank) was appointed substituted trustee. It was not an executor of Ehret's will and (except for a commission on the sale of real estate) has never yet received any compensation or commission on principal for its services as trustee. It filed a trustee's account, which shows assets having a corrected carried account value of $746,550.81; at the time of the audit, these assets had a market value of $1,020,958.16. The Bank claimed an interim commission*fn2 on principal in the amount of $10,000.*fn3 This was for ordinary services only, and did not include
or represent any compensation or commission for extraordinary services. The guardian ad litem objected to the payment of any interim commission, and the auditing Judge disallowed this credit in the account. His adjudication was confirmed by the Court en banc,*fn4 whereupon Provident National Bank, we repeat, took this appeal.
The sole issue before this Court is whether a trustee under a testamentary trust created prior to 1945, which was not an executor, may receive for its ordinary services as trustee an interim commission on principal.
With respect to a trust created prior to 1945, the law has been thus clearly established: Unless a testator or settlor clearly provides otherwise -- (1) a corporate or an individual fiduciary who was both executor and trustee was entitled, under the Act of 1864 and the Act of 1917, infra, to only one commission on principal for its ordinary services in both capacities, and this was payable upon the termination of its services as executor; (2) the Act of April 10, 1945, P. L. 189, which specifically repealed (a) § 45 of the Fiduciaries Act of June 7, 1917, as amended, and (b) §§ 2, 5(1), 5(2) and 6 of the Act of May 1, 1953, P. L. 190, 20 P.S. § 3274, et seq., which permitted (under certain specified circumstances) payment of more than one commission on principal to a fiduciary who served as both executor and trustee in wills or trusts created prior thereto, cannot Constitutionally be retroactively applied; (3) such Constitutional limitations as well as the statutory restrictions or prohibitions contained in the Act of 1864 and of 1917 have no application (a) to fiduciaries who were entitled even, before the termination of the trust, to an interim commission on principal
for unusual or extraordinary services, or (b) to fiduciaries who resign or die before the termination of the executorship or trusteeship, as the case may be: Williamson Estate, 368 Pa. 343, 82 A.2d 49, and cases cited therein; Scott Estate, 418 Pa. 332, 211 A.2d 429.
The lower Court, in disallowing the interim commission, relied upon Williamson Estate, 368 Pa., supra, and Scott Estate, 418 Pa., supra, and the broad general language used in each of those cases.
In Williamson Estate, 368 Pa., supra, this Court decided that where the same fiduciary is both executor and trustee and had received, for its ordinary services in both capacities, a commission on principal at the termination of its executorship, (1) it could not thereafter receive an interim or an additional commission on principal for its ordinary services in its dual capacity, but (2) it could receive an additional or interim commission on principal for extraordinary or unusual services. This Court further held that the Act of April 10, 1945, supra -- which repealed § 45 of the Fiduciaries Act of June 7, 1917, supra (which section had prohibited the same fiduciary from receiving a commission on principal as executor and another commission as trustee) -- may not be applied retroactively, and a fiduciary who was both executor and trustee and had received a commission on principal as executor prior to the enactment of the Act of 1945 may not be paid an additional commission on principal for its ordinary services as trustee. The Court said (pages 350-351, 352-353): "We ...