Raymond Moore Remick.

The statutory law of decedents' estates in Pennsylvania, with annotations and forms online

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such person or persons as may be their successors therein, in all
cases, in like manner as if no such change had occurred or act
been done; and in all cases of vacancy in the administration or
trust as aforesaid, the successors therein shall be made party to
such action or proceeding, in the manner provided by clauses
(/)> (9} an d (/O of this section.



FIDUCIARIES ACT SECTION 35 (), (/) 397

NOTE. This is derived from Section 32 of the Act of 1834, I Purd. 1113
(Section 33 of the Commissioners' Draft), which was founded on Section
7 of the Act of March 24, 1818 (7 Sm. L. 132), P. L. 285, 4 Purd. 4929.
The latter section includes "executors or administrators, trustees or as-
signees," and is not to be repealed so far as it relates to trustees not
within the jurisdiction of the orphans' court, and to assignees.

The Act of 1818 related only to cases in which suit was brought by
fiduciaries. The Act of 1834 extended this to suits against executors or
administrators.

Section 13 of the Act of April 9, 1849, P- k. S 2 ^, I Purd. 1115, includes
cases in which executors or testamentary trustees are plaintiffs.

Section 32 of the Act of 1834 is altered, in the present draft, by substi-
tuting "fiduciaries" for "executors or administrators," by extending it to
cases where fiduciaries are parties although the action was not brought by
or against them, by adding "removal" in the fourth line, by adding the
words "or trust" in the tenth and fourteenth lines, and by substituting a
reference to other clauses of the new act for the reference to Sections 26
and 27 of the Act of 1834. The words "or equitable" have been inserted
in the first line.

It seems that Section 13 of the Act of 1849, above referred to, may be
repealed, as well as Section 7 of the Act of 1818, so far as it relates to
fiduciaries within the scope of the present act.

521. FAILURE TO PLEAD ANY MATTER RELATIVE
TO ASSETS, OR TO REPLY THERETO, NOT
TO BE DEEMED AN ADMISSION.

(/) The omission of an executor or administrator to plead to
any action brought against him in his representative character, that
he has fully administered the estate of the decedent, or any other
matter relative to the assets, shall not be deemed an admission of
assets to satisfy the demand made in such action ; also the omission
of the plaintiff to reply to any such matter when pleaded, shall
not be deemed an admission of the want of assets as aforesaid, nor
shall such omission otherwise prejudice either party; and no mis-
pleading, or lack of pleading, by executors or administrators, shall
make them liable to pay any debt or damages recovered against
them in their representative character, beyond the amount of the
assets, which in fact, have come or may come or should have
come into their hands.

NOTE. This is Section 37 of the Act of 1 1834, i Purd. 1114 (Section 38
of the Commissioners' Draft), which was new in the Act of 1834. In the
last line the words "or should have come" have been added. It might be
considered that this section has been rendered obsolete by the statutory
changes in the system of pleading. But the Commissioners have concluded
to recommend its retention lest its omission might give rise to some er-
roneous inference.



398 FIDUCIARIES ACT SECTIONS 35 (*) -36-37

522. ABATEMENT OF FAILURE TO TAKE OUT LET-

TERS IN DECEASED PLAINTIFF'S ESTATE.

(k) In any suit now pending or hereafter to be brought in any
court of this state, if the plaintiff be dead or shall die during the
pendency thereof, and no letters testamentary or of administFation
have been or shall be taken out in this state within one year after
the suggestion of the death of such plaintiff upon the record, it
shall not be the duty of the defendant to raise an administrator
for the purpose of prosecuting the same, but the court in which
such suit is or shall be pending may, after due sen-ice upon the
executors named in the will of such plaintiff, if known to defend-
ant, or upon the next of kin of the decedent entitled to administra-
tion, of a rule to show cause, enter an order that said suit shall
abate, unless, before the return day of such rule, letters testa-
mentary or of administration shall be duly issued.

NOTE. This is Section i of the Act of May 5, 1854, P. L. 570, i Purd.
228, 2 P. & L. 2665, changed so as to provide for a rule to show cause.
The section now provides that at the end of the year the suit shall abate
and the prothonotary shall make an entry accordingly, provided that the
court shall direct a notice to be served one month before such entry shall
be made.

523. STATUTE OF LIMITATIONS TO RUN AGAINST

DEBT FALLING DUE TO ESTATE OF DECE-
DENT AFTER HIS DEATH ALTHOUGH LET-
TERS HAVE NOT BEEN GRANTED.
SECTION 36. The statute of limitations shall begin to run against
a debt or demand arising or falling due to the estate of a decedent,
after his or her death, from the time such debt or demand shall
arise or fall due, as aforesaid, notwithstanding that letters testa-
mentary or letters of administration have not been granted on
such estate.

NOTE. This is Section i of the Act of April 6, 1905, P. L. 114, 6 Purd.
6527. Section 2 is a general repealer.

In the next to the last line, "granted" has been substituted for "taken
out"

524. SUITS AGAINST FIDUCIARIES WHO DO NOT

RESIDE IN COUNTY THE COURT OF WHICH
HAS JURISDICTION OF THEIR ACCOUNT.
SECTION 37. In all cases where executors, administrators,
guardians or trustees shall not reside within the county the



FIDUCIARIES ACT SECTION 37 399

orphans' court of which has jurisdiction of their accounts, pro-
ceedings may be had and suits may be brought against them by
creditors and others interested in the estates, in the counties where
such accounts are to be settled, and process may be served on
said fiduciaries, in any other county by the sheriff of such other
county, who shall be deputized for that purpose by the sheriff
of the county in which the process issues, or process may be served
upon any surety on the official bonds of such fiduciaries.

NOTE. This is Section i of the Act of March 27, 1854, P. L. 214, 4 Purd.
4929, with the insertion of the words "guardians or" instead of "assignees
or other," thus limiting the section to fiduciaries within the scope of the
present act. The Act of 1854 is not recommended for repeal so far as it
relates to other fiduciaries.

The words "the county the orphans' court of which has jurisdiction"
have been substituted for "the jurisdiction of the court having control."
The provision as to deputizing the sheriff of another county has been sub-
stituted for the following: "and process may be served by proper officers
of said counties, or their deputies, on said executors, administrators, as-
signees or other trustees beyond the bounds of said counties, as if they
resided therein, or upon any surety on their official bonds, with like effect
as if they had resided within the jurisdiction of the courts having control
of their accounts."

A writ of summons can be served by the sheriff upon an executor tem-
porarily within his jurisdiction whose residence is in another county where
the letters were granted.

The purpose of the Acts of March 27, 1854, P. L. 214, and of June 7,
1917, P. L. 447, Sec. 37, was to assist creditors and others and not to pro-
tect! the fiduciary nor to limit the suit to a particular jurisdiction.

Cohn died in Philadelphia on June 24, 1917, having made his last will
and testament, duly admitted to probate before the Register of Wills of
Philadelphia County, and letters testamentary were granted to the de-
fendant. On August 15, 1918, the plaintiff brought an action in assumpsit in
the Court of Common Pleas of Lancaster County against the defendant as
executor of the decedent, and while the defendant was visiting there, the
Sheriff of Lancaster County served the writ of summons upon him. The
sole question raised in the proceeding was whether a writ of summons
can thus be served by the Sheriff upon an executor whose residence is in
another county while the defendant is in his jurisdiction.

In discharging a rule to set aside the summons the court, per LANDIS, J.,
said :

"By the Act of June 7, 1917, P. L. 447, called 'The Fiduciaries Act,'
the Act of 1854 is expressly repealed, 'so far as it related to fiduciaries
subject to the jurisdiction of the orphans' court' (see page 543), and in
lieu thereof, the 37th section was inserted, as follows: (quoting it).
This, too, is a statute made for the benefit of creditors and others, but
not to protect the fiducianr nor to limit the suit to a particular juris-



400 FIDUCIARIES ACT SECTIONS 37-38-39

diction. Particularly is this so, if personal service can be had, for under
such circumstances, what good reason would there be for going to an-
other county to accomplish a purpose which could as well be reached
at home?" Harris v. Blatt, 28 Dist. n, 35 Lane. 361, 8 Leh. 80, 66 P. L. J.
648, 32 York 101.

525. SUITS BY FIDUCIARIES AGAINST COFIDU-

CIARY.

SECTION 38. Where one of two or more fiduciaries shall be
personally or individually indebted, obligated or liable to the
estate which he represents, it shall be lawful for the other
fiduciaries, or either of them, to institute an action at law, bill
in equity, or other appropriate legal or equitable proceeding, on
behalf of the said estate, against such fiduciary, individually, to
recover or enforce the said indebtedness, obligation or liability, in
the same manner as though such fiduciary were not connected with
the said estate : Provided, That this shall not in anywise affect the
duty or liability of such fiduciary to account therefor in the office
of the register of wills or in the orphans' court in the manner now
provided by law, the remedy herein provided being in addition to
other remedies, legal or equitable, already existing.

NOTE. This covers Sections i and 2 of the Act of May n, 1901, P. L.
174, i Purd. 1115, substituting "fiduciaries" for "executors, administrators,
guardians, assignees, or trustees," inserting "or liable," and "or lia-
bility," substituting "other" for "remaining" in line 4, and inserting in
the proviso the words from "office" to "in the,"

Since the Act of 1901 includes assignees and trustees other than those
over whom the orphans' court has jurisdiction, it should not be repealed
generally.

"If Edwin A. Yarnall, the executor not indebted, had, under Section 38
of the Fiduciaries Act of June 7, 1917, P. L- 447, proceeded against his
co-executor for the amount of the note, it would have been a good defence
for Albert T. Yarnall to have averred that his distributive share would
be sufficient to pay said indebtedness. Mutual demands extinguish each
other, and the indebtedness to the estate by a legatee has always been
considered a payment on account of the legacy : Palmer's Estate, 2 Del.
180, and cases there cited." THOMPSON, J., in Young's Est., 30 Dist. 182.

526. REVIVAL OF JUDGMENT AGAINST EXECUTOR

OR ADMINISTRATOR OF JUDGMENT CRED-
ITOR.

SECTION 39. In all cases where a creditor has appointed or
shall appoint his judgment debtor his executor, or where such



FIDUCIARIES ACT SECTIONS 39-40 401

judgment debtor has been or shall be appointed administrator of
the creditor, and the said judgment is a lien on the real estate of
such executor or administrator, and the same is bequeathed
specifically to a legatee, or generally in the residuary clause of
such testator's will, or where any testator or intestate, having a
judgment situated as aforesaid, shall have creditors interested in
preserving the lien of such judgment, such legatee or creditor
or the next of kin of an intestate, interested in such judgment,
may suggest his or their interest in the same upon the record
thereof, and issue al writ of scire facias against the defendant, to
revive the same, and continue the lien thereof, at any time when
such proceedings shall be necessary under the laws of this com-
monwealth; which judgment, so revived, shall remain for the use
of all persons interested therein.

NOTE. This is Section 2 of the Act of April 3, 1829 (10 Sin. L. 317)
P. L. 122, i Purd. 1109, changed so as to cover the case of an adminis-
trator as well as an executor.

527. COMPROMISE BY FIDUCIARY OF CLAIMS
AGAINST ESTATE, OR QUESTIONS AS TO
WILL OR DISTRIBUTION.

SECTION 40. Whenever it shall be proposed to compromise or
settle any claim, whether in suit or not, by or against a minor or
the estate of a decedent, or to compromise or settle any question or
dispute concerning the validity or construction of any last will
and testament or the distribution of any decedent's estate, the
orphans' court having jurisdiction of the accounts of the fiduciary
shall be authorized and empowered, on petition by such fiduciary,
setting forth all the facts and circumstances of such claim or
question and proposed compromise or settlement and duly verified
by oath or affirmation, and after due notice to all parties interested,
and after due consideration, aided, if necessary, by the report of a
master, if satisfied that such compromise or settlement will be
for the best interests of such minor or of the estate of such
decedent, to enter a decree authorizing the same to be made,
which decree shall operate to relieve the fiduciary of responsibility
in the premises.

NOTE. This is a new section.

It would seem that, at present, it is doubtful whether the orphans' court
has power to authorize compromises, which must be made by fiduciaries
26



402 FIDUCIARIES ACT SECTIONS 40-41 (a) i

on their own responsibility: Lowery's Estate, 9 Pa. C. C. 88; Morton's
Estate, 201 Pa. 269.

Such jurisdiction however has been frequently exercised to the very
great advantage of the parties litigant or concerned in the dispute; and it
is proposed in this section to place the jurisdiction of the court beyond
question. Otherwise, a fiduciary may feel bound to litigate and thus throw
the chances of the litigation on his cestui que trust or ward, or assume the
responsibility of the settlement and take the chance of having his conduct
questioned in the future.

528. INVESTMENTS BY FIDUCIARIES, LEGAL IN-
VESTMENTS, DEBT OF UNITED STATES,
ETC.

SECTION 41. (a) i. When the fiduciary shall have in his hands
any moneys, the principal or capital whereof is to remain for a
time in his prossession or under his control, and the interest,
profits or income whereof are to be paid away, or to accumu-
late, or when the income of real estate shall be more than
sufficient for the purpose of the trust, such fiduciary may invest
such moneys in the stock or public debt of the United States, or
in the public debt of this commonwealth, or in bonds or certifi-
cates of debt now created or hereafter to be created and issued
according to law by any of the counties, cities, boroughs, town-
ships, or school districts of this commonwealth, or in mortgages
or ground rents in this commonwealth : Provided, That nothing
herein contained shall authorize any fiduciary to make any invest-
ment contrary to the directions contained in the will of the de-
cedent in regard to the investment of such moneys.

NOTE. This and the next two paragraphs are a combination of Section
14 of the Act of March 29, 1832, I Purd. 1109, Section 2 of the Act of
April 13, 1854, P. L. 369, i Purd. mo, and Section i of the Act of May 8,
1876, P. L. 133, i Purd. 1 1 10.

The Commissioners believe that the powers of investment granted to
fiduciaries under the present law are too greatly restricted and that their
enlargement would be welcomed throughout the State. At present trustees
are limited to loans of the United States, the State of Pennsylvania,
municipal corporations of the State, mortgages and ground rents; and
according to the literal wording of the statutes the decree of the orphans'
court should be first obtained, although in practice the statutes have been
considered as authorizing the investments specified, and the necessity of a
preliminary application has been disregarded.

The Commissioners would be willing to recommend a more extensive
act were it not for the Constitution, which in Art. Ill, Section 22, would
seem to prohibit the legislature from authorizing an investment in the
bonds or stocks of a private corporation. They have, however, drafted



FIDUCIARIES ACT SECTION 41 (a) i 403

this section so as to include investments in bonds of municipal corporations
in other states, requiring, in such instances, a preliminary application to
the court for authority to make such investments.

The division into three paragraphs has been made for the purpose of
clearness. The investments enumerated in paragraph I are made legal
investments without application to the court. The requirement of the
existing laws that the approval of the court shall be obtained in every
case is disregarded in practice; and it seems better to omit this require-
ment except in cases of investments in real estate in Pennsylvania or in
bonds of other states or of municipalities outside of the commonwealth, as
enumerated in paragraph 2.

Section 14 of the Act of 1832 was copied from the Act of February 18,
1824, P. L. 25, except that it authorizes the investment of surplus income of
real estate as well as principal and interest of personal estate.

The above-mentioned sections of the Acts of 1854 an d : 8?6 apply to all
trustees, and should be repealed only so far as they relate to fiduciaries
who are within the scope of the present draft.

An investment by a trust company under the supervision of the De-
partment of Banking in the bonds issued by a private corporation, security
for which is a mortgage covering the real estate owned by the private
corporation, is not a legal investment under the constitution and laws.

Myers, Dep. Atty. Gen., in an opinion to the Banking Commissioner
August i6th, 1920, said :

"There is nothing contrary to Section 22, Art. Ill of the Constitution
in Section 41 (a) of the Act of June 7, 1917, P. L. 447. That act does not
authorize fiduciaries to invest in the bonds or stock of any private corpora-
tion.

"You are therefore advised that the investment by a trust company under
the supervision of your department in the bonds issued by a private cor-
poration, security for which is a mortgage covering the real estate owned
by the private corporation, is not a legal investment under the Constitu-
tion and laws of the commonwealth." Hotel Mortgage, 50 Pa. C. C. 82;
s. c. sub nom In re Trust Funds, 68, P. L. J. 608.

Where an individual owning real estate in the City of Philadelphia
made a first mortgage on the same to a trust company as trustee to
secure an issue of 450 $1,000 bonds, Hon. Robert S. Gawthrop, First
Deputy Attorney General in an opinion on November 4, 1921, to the
Commissioner of Banking held that such bonds were not comprehended
under the word "mortgages" as used in this section of the Act and could
not therefore be considered as legal investments for trust funds. In so
holding he said :

"Manifestly, the bonds in the present case do not fall within any class
of securities described in the above cited section of the act unless it be
that they are comprehended within the meaning of the words 'mortgages
in Pennsylvania.' If the question were an open one in this State, I
should have no hesitation in concluding that the investment in these
bonds is not an investment in a mortgage in the Commonwealth. One
who buys one of the four hundred and fifty $1,000 bonds, secured



404 FIDUCIARIES ACT SECTION 41 (a) i, 2 ,

though it be by a first mortgage given by a trustee, in my opinion, does
not invest his money in a mortgage. The owner of the bond has no such
independent control of the mortgage as he would have if he owned the
mortgage. The question is not one of the safety of the investment, but
one of the character thereof as required by the statute. It would have
been a simple manner for the Legislature when it enacted the Fiduciaries
Act to have authorized trustees to invest in bonds secured by mortgages
on real estate situate and owned by individuals in the Commonwealth,
but it did not do so and thereby continued the policy of requiring the
utmost conservatism in providing legal investments for trust funds."
Legal Investments, 69 P. L. J. 777, 7 Pa. State Dept. Rep. 2060.

(Note: This is contrary to the expressed opinion of many leaders
of the bar. Editor.)

529. INVESTMENTS IN OTHER REAL ESTATE
WITHIN THE COMMONWEALTH, OR IN
DEBTS OF OTHER STATES OR COUNTIES
OR CITIES THEREOF.

2. When a fiduciary shall have in his hands any moneys, as
aforesaid, he may present a petition to the orphans' court having
jurisdiction of his accounts, stating the circumstances of the
case and the amount or sum of money which he is desirous of
investing; whereupon it shall be lawful for the court, upon due
proof, aided, if necessary, by the report of a master, to make an
order directing the investment of such moneys in real estate in
this commonwealth other than ground-rents, or in the bonds or
certificates of debt now created or hereafter to be created and
issued according to law by any other state of the United States
or by any of the counties or cities of such other state, at such prices,
or on such rates of interest and terms of payment respectively,
as the court shall think fit: Provided, That no such investment
shall be directed unless it shall be the opinion of the court that
it will be for the advantage of the estate and no change be made
in the course of succession by such investment as regards the
heirs or next of kin of the cestui que trust : And provided further,
That nothing herein contained shall authorize the court to make
an order contrary to the directions contained in any will in regard
to the investment of such moneys.

See Legal Investments, 69 P. L. J. 777, 7 Pa. State Dep. Rep. 2060.



FIDUCIARIES ACT SECTIONS 41 (a) 3, (&)-42 (a) 405

530. FIDUCIARY NOT LIABLE FOR LOSS ON SUCH

INVESTMENTS.

3. In case the said moneys shall be invested as set forth in
paragraph i of this clause, or conformably to the directions of
the court under paragraph 2 of this clause, the said fiduciary shall
be exempted from all liability for loss on the same, in like manner
as if such investments had been made in pursuance of directions in
the will creating the trust, it being hereby declared that the in-
vestments mentioned in this section are legal investments of
moneys by fiduciaries.

531. EXPENSE OF PROCURING GUARANTY OF IN-

VESTMENTS.

(&) Any fiduciary required by law, by the order of any
orphans' court, or by the provisions of any last will and testament,
under or by authority of which such fiduciary is acting, to invest
funds within his control in mortgages or other securities, may
include, as a part of the lawful expense of executing his trust, a
reasonable sum paid to a; company, authorized under the laws of
this state so to do, for guaranteeing the payment of the principal
and interest of such mortgage or other securities, not exceeding
one-half of one per centum per annum 1 upon the principal of
such mortgage or other securities.

NOTE. This is Section i of the Act of May 28, 1907, P. L. 271, 5 Purd.
5893, changed by substituting the word "fiduciary" for "receiver, assignee,
guardian, committee, trustee, executor, or administrator," and omitting the
reference to "any assignment, deed * * * or other document."

The Act of 1907 should be repealed only so far as it relates to fiduciaries
subject to the jurisdiction of the orphans' court

Section 2 of the Act of 1907 is a general repealer.

1 Added by Amendment of May 2, 1919, (P. L. 144).

532. ORGANIZATION OF CORPORATION TO CARRY

ON DECEDENT'S BUSINESS, PROPERTY OF
ESTATE MAY BE CONTRIBUTED IN RETURN
FOR STOCK WHETHER OR NOT THE WILL
AUTHORIZED CARRYING ON THE BUSINESS.

SECTION 42. (a) Fiduciaries may themselves, or jointly with
others, organize a corporation to carry on the business of the
decedent, whether he die testate or intestate, whether the business



406 FIDUCIARIES ACT SECTION 42 (a), (b)

was owned solely by him or in partnership with others, if such
business be one for which a charter could have been obtained in
the lifetime of the decedent, and may contribute all or part of
the property of the estate which was invested in the business at
the time of the death of the decedent, as capital to such corpora-
tion and accept stock in the corporation in lieu thereof.

NOTE. This and the two following clauses are based upon Section I of
the Act of April 22, 1889, P. L. 42, 4 Purd. 4928, extended to cases of
guardians and administrators and to cases where the will does not



Online LibraryRaymond Moore RemickThe statutory law of decedents' estates in Pennsylvania, with annotations and forms → online text (page 43 of 71)