Blank, Rome, Klaus & Comisky, Lester J. Schaffer, Philadelphia, for appellant.
Egli, Walter, Reilly & Wolfson, James T. Reilly, Lebanon, for Ruth S. Cohen.
Davis, Katz, Buzgon & Davis, Charles J. Romito, Lebanon, for appellee, Charles J. Romito, Guardian ad litem, etc.
Jones, C. J., and Eagen, O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ.
This appeal arises from a final decree of the Court of Common Pleas, Orphans' Court Division, of Lebanon County.
The facts surrounding this appeal are as follows. Alec H. Cohen died testate on August 2, 1971. In his will, dated September 24, 1966, the decedent directed that his debts be paid; that his wife, Ruth S. Cohen, receive a bequest of fifteen thousand dollars ($15,000); that Sol Berman be appointed trustee of his estate for the decedent's minor children; and that the decedent's daughter, Barbara S. Goodman, be appointed executrix of his estate. When the executrix filed the first and partial account on May 14, 1973, exceptions were filed by the decedent's wife and the matter was heard by a master. After the master heard testimony, the decedent's wife again filed exceptions, which were heard by the Orphans' Court and an adjudication was made. The court reversed certain findings of the master and affirmed others. This appeal followed from the final decree of the court below.
Appellant, Barbara S. Goodman, first argues that the court erred in reversing the decision of the master which held that a loan, in the amount of $25,000, made by the decedent in 1966, should be paid out of the assets of the estate proper, rather than from insurance policies*fn1 that were assigned to the bank as collateral for the loan on September 7, 1966. We agree.
In Miller Estate, 402 Pa. 140, 143, 166 A.2d 10, 11 (1960), this court, in discussing the determinative factor in ascertaining whether a debt should be paid out of the estate or insurance policy proceeds pledged as collateral for a loan, stated:
"The issue which is usually determinative of the problem in this area is the intention of the parties as indicated by the terms of the will, the insurance policy, the assignment and any other pertinent extrinsic evidence. . . . [T]he intention of the parties, if ascertainable, must control."
In the instant case, on September 7, 1966, the testator executed the assignment of the insurance policies to the bank as collateral for the loan on a standard form contract which was prepared by the American Banker's Association Bank Management Commission, supplied by the ...