Smith's Petition
Opinion of the Court
This matter came before the court on petition and answer. Petitioner asks a decree requiring respondent as trustee to sell at public or private sale certain real estate acquired by it pursuant to foreclosure of a mortgage which respondent previously held as trustee for sundry trusts. From the petition and answer the following facts appear: The Girard Trust Company, prior to foreclosure, held a mortgage for $150,000 secured on premises 244-254 South Fifth Street, as “trustee for sundry trusts”. This mortgage was foreclosed and the sheriff conveyed the mortgaged premises on December 12,1932, to the mortgagee as “trustee for sundry trusts” and the title is still so held. Respondent has been administering the property since for the benefit of those who held participations in the mortgage and their successors in title. The carrying charges exceed the income and have from the time the mortgage was foreclosed. The deficit has since then been prorated among the participation holders and either paid by them or charged against the participations of those who failed to pay the same.
Petitioner on April 19, 1938, acquired by purchase from a participation holder for the sum of $50 a 4500/150,000 participation interest. Averring that he had been denied the names of the other parties having like interests in the property and that the Girard Trust
Before coming to the merits of the application, we must notice a serious question of jurisdiction. While respondent does not challenge our jurisdiction but, on the contrary, its learned counsel stated at the bar that it was content that we take jurisdiction, nevertheless a lack of power in a court to entertain a proceeding is an obstacle that cannot be overcome by waiver or consent. It becomes our duty, therefore, to consider the question of our own motion.
Whether we have jurisdiction must depend on whether the proceeding comes within the scope of the amendment made by the Act of June 26, 1931, P. L. 1384, to section 9 of the Orphans’ Court Act of June 7, 1917, P. L. 363. This amendment in express terms adds to our jurisdiction: “(ri) The control, removal, discharge, and settlement of accounts of trustees of trusts inter vivos; . . .”
We pointed out in In re Wanamaker Institute of Industries, 36 D. & C. 406, that it is a mistake to suppose
“IV. The control, removal and discharge of trustees, and the appointment of trustees, and the settlement of their accounts.”
From this it may well be reasoned that, when the Act of 1931 added the qualifying words “inter vivos”, it was thereby intended to limit the concurrent jurisdiction conferred, to such trusts-only as might be identified as “inter vivos trusts”. That jurisdiction over all non-testamentary trusts was not intended to be granted would appear also from the fact that the amending Act of 1931 by separate paragraph (o) gives jurisdiction in express terms over “The control, removal, discharge, and settlement of accounts of trustees of life insurance trusts, whether taking effect during the lifetime or at or after the death of the insured or settlor; . . .” Had the legislature by subdivision (n) intended to cover all types of nontestamentary trusts such separate provision for life insurance trusts would have been unnecessary.
What then is meant by the term “trusts inter vivos” ? In In re Trust of Bailey and Regar, 29 D. & C. 215, at page 218, Judge Stearne of this court says, “the term ‘inter vivos’ is a Latin expression meaning ‘between living persons’ ”, and continues, “Whether or not the wording of the act as quoted is broad enough to include trusts set up by other than individuals, i. e., corporations, partnership firms, trade associations, etc. . . .” was a question which he deemed unnecessary to decide in that case. In Reading National Bank & Trust Com
All the decisions of this court that have so far construed the amendment of 1931 have respected, even though they have not clearly defined, the limitation imposed by the phrase “trusts inter vivos”. Thus in Shaffer’s Estate, 21 D. & C. 90, by Sinkler, J., the act was held not to extend jurisdiction to trusts arising by operation of law. In In re Stief et al., 32 D. & C. 289, by Van Dusen, P. J., it was held not to apply to trusts created for a temporary purpose, even though by written instrument, but only to a continuing trust requiring both administration and distribution. See also Schwartz’s Estate, 35 D. & C. 386 (Bolger, J.), aff. 337 Pa. 143, and In re Wanamaker Institute of Industries, 36 D. & C. 406.
The orphans’ courts of the other counties have indicated a like disinclination to extend the amendment of 1931 beyond its express terms, and have refused to take jurisdiction in the following cases: Miller’s Estate, 19 D. & C. 141 (Lancaster Co.), agency cheated by letter of attorney; Leinenbach’s Petition, 24 D. & C. 443 (Schuylkill Co.), and Musser’s Account, 39 D. & C. 475 (Lancaster Co.), assignments for benefit of creditors; Sullivan’s Petition, 34 D. & C. 154 (Berks Co.), agreement transferring to a trust company styled “trustee agent and attorney” a participation mortgage and de
Prom these cases it would appear there is very serious doubt of our power to entertain jurisdiction in these proceedings, but we find ourselves unable to decide the point because neither in the petition nor the answer can we find sufficient information to enable us to determine what the actual relationship of the various parties in interest here is. The pleadings ought to state clearly whether there is any instrument in writing or any agreement apart from the letters issued to the petitioner certifying his ownership of a participating interest. If so, a copy should be attached. Or if the mortgage contains provisions governing the participants’ rights such provisions should be set forth. In Sullivan’s Petition, supra, a somewhat similar case, Judge Marx, after analyzing the agreement averred in the petition to have established a trust inter vivos, reached the conclusion that it was in essence but an agency arrangement and not a trust at all. It is well settled that the words “trust” and “trustee” and other like descriptive terms are not in themselves sufficient to establish a trust if, in fact, it is not one. See Wilbur Trust Co. v. Knadler et al., 322 Pa. 17.
The decree prayed for is refused. Leave is granted to plaintiff to amend his petition to supply the omis
Case-law data current through December 31, 2025. Source: CourtListener bulk data.