Appeal from the Order entered on March 9, 1987, in the court of Common Pleas of Montgomery County, Civil Division, at No. 81-10508.
David M. Jordan, Norristown, for appellant.
William J. Brennan, King of Prussia, for appellee.
Cirillo, President Judge, and Brosky and Beck, JJ. Cirillo, President Judge, files a concurring opinion.
[ 373 Pa. Super. Page 468]
This case raises issues related to the creation of an express trust within a business context, the revocation of the trust by oral agreement, and the applicability of laches to the trust.
Appellant DiLucia brought an action in equity to enforce a written declaration of trust:
I, Alvin H. Clemens, hereby declare to hold IN TRUST Two Thousand (2,000) shares of Unicom, Inc.'s stock for the equitable owner, Anthony M. DiLucia, with a duty to transfer legal title to said two thousand (2,000) shares to Anthony M. DiLucia thirty-six months from this date. Dated: 4/2/68
DiLucia, a building contractor, constructed certain improvements at the request of appellee Clemens to the offices of Unicom, Inc. ("Unicom"), a corporation of which Clemens was an officer and principal shareholder. In April 1968 DiLucia was compensated for this work, and in addition Clemens created the declaration of trust obligating himself as trustee to transfer 2,000 shares of Unicom to DiLucia. At the time of the creation of the trust the stock was restricted. DiLucia paid $2,000 for the stock which was its fair market value. At the time and all relevant
[ 373 Pa. Super. Page 469]
times thereafter, Clemens personally held in excess of 25,000 shares of stock in the corporation. The shares were fungible. Clemens made no attempt to segregate DiLucia's 2,000 shares. In June 1972, Unicom began to offer its shares on the public market. Clemens did not transfer legal title of the shares to DiLucia pursuant to the declaration of trust.
Thereafter, the facts are disputed. Clemens alleges that he and DiLucia agreed on a settlement of various claims from subsequent business transactions which included a release of DiLucia's rights under the 1968 declaration of trust. DiLucia acknowledges the settlement but denies he relinquished his claim to the Unicom shares. In 1981, DiLucia requested the delivery of the shares. Clemens refused, and DiLucia brought this action in equity to enforce the trust.
The trial court denied DiLucia relief. It found that the settlement included a release by DiLucia of any claims for Unicom stock and for the $2,000 DiLucia had paid in 1968. It also concluded that the declaration of trust did not establish a trust but instead established a contract. The trial court further concluded that DiLucia failed to pursue his claim within the applicable statute of limitations for the contract and that Clemens was prejudiced by DiLucia's delay. DiLucia's timely exceptions were dismissed and DiLucia appealed.
Our standard of review as to the findings of a court in equity is well established. "Facts found by the chancellor, when supported by competent evidence in the record, are binding. However, no such deference is mandated for conclusions of law, and we are at liberty to review such conclusions." Presbytery of Beaver-Butler v. Middlesex Presby. Church, 507 Pa. 255, 266, 489 A.2d 1317, 1323 (1985), cert. denied 474 U.S. 887, 106 S.Ct. 198, 88 L.Ed.2d 167 (1985). We will not reverse on appeal unless the trial court abused its discretion or committed an error of law. Valley Forge Hist. Soc. v. Washington Mem. Chapel, 330 Pa. Super. 494, 479 A.2d 1011 (1984).
[ 373 Pa. Super. Page 470]
We first consider whether the trial court erred in concluding that a valid trust was not created and that the purported trust was actually a contract. The trial court reasoned that a valid trust was not created because there was no identifiable res. The court reasoned that the shares were not identified or segregated. Furthermore, the court reasoned that at the time of the creation of the trust, the stock was restricted and ...