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ESTATE PHILIP F. DUPONT (10/28/77)

decided: October 28, 1977.

ESTATE OF PHILIP F. DUPONT, DECEASED. APPEAL OF WILLIAM R. SHORE, HARRY T. DEVINE, AND GIRARD TRUST BANK, TRUSTEES UNDER THE WILL OF FRANCES DUPONT RUST IN EXERCISE OF HER POWER OF APPOINTMENT UNDER THE WILL OF PHILIP F. DUPONT FOR THE BENEFIT OF CARROLL MORGAN CARPENTER AND HER ISSUE


COUNSEL

Robert M. Landis, Philadelphia, for appellant.

H. Ober Hess, Philadelphia, for appellee, Carroll M. Carpenter.

Eagen, O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ. Jones, former C. J., did not participate in the consideration or decision of this case. Pomeroy and Nix, JJ., concur in the result.

Author: Roberts

[ 475 Pa. Page 51]

OPINION OF THE COURT

Philip F. duPont died testate in 1928, leaving one-third of the residue of his estate to the Fidelity-Philadelphia Trust Company in trust for the benefit of his daughter, Mrs. Frances duPont Rust. In his will, Mr. duPont created in Mrs. Rust a special testamentary power of appointment over the one-third share of the residue. The will provides that Fidelity-Philadelphia is

"upon her death to transfer, assign, and pay over the principal of her share of [Mr. duPont's] residuary estate unto such of her children and issue of deceased children, and in such proportions as she may by her Last Will and Testament or any writing in the nature thereof direct, limit and appoint" (emphasis added).

Mrs. Rust died in 1975. In her will, Mrs. Rust appointed a part of this share to appellants William Shore, Harry Devine, and Girard Trust Bank in trust for the benefit of her surviving daughter Carroll (Mr. duPont's granddaughter) for life and then for the benefit of the issue of Carroll (Mr. duPont's great grandchildren). Mrs. Rust gave appellants the discretion to make periodic payments from principal to Carroll's issue.

Upon Mrs. Rust's death, Fidelity-Philadelphia filed an account in the Orphans' Court Division of the Court of Common Pleas of Chester County. The auditing judge reviewed the objection to Mrs. Rust's exercise of her special power of appointment and concluded that Mrs. Rust exceeded the bounds of her special power by appointing part of the residue for the benefit of the issue of Mrs. Rust's surviving daughter Carroll. Objections to the adjudication of the auditing judge were dismissed by the orphans' court. In this

[ 475 Pa. Page 52]

    appeal,*fn* appellants contend that Mr. duPont authorized Mrs. Rust to appoint to Carroll's issue while Carroll is still living. We do not agree. We agree with the holding of the orphans' court that Mrs. Rust exceeded her special power and therefore affirm.

The orphans' court interpreted "children and issue of deceased children" to include those persons who are either living "children" of Mrs. Rust or "issue of deceased children" of Mrs. Rust at the time of her death. The court concluded that the potential beneficiaries of the special power are confined to those persons within the precise class defined in Mr. duPont's will, and that Mrs. Rust could not alter or expand that group. Hence, the court held invalid the appointment in trust for the benefit of the issue of Mrs. Rust's surviving daughter Carroll because Carroll's issue were not "issue of deceased children" of Mrs. Rust at Mrs. Rust's death.

"The donee of a power is simply a trustee for the donor to carry into effect the authority conferred by the power. In exercising the power, he must observe strictly its provisions and limitations." Rogers' Estate, 218 Pa. 431, 433, 67 A. 762, 762 (1907); Schede Estate, 426 Pa. 93, 231 A.2d 135 (1967). For her exercise of the special power to be effective, Mrs. Rust had to exercise that power within the limits of her authority. ...


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