Raymond Moore Remick.

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

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authorize or direct the continuance of the business. Cases where the
testator was a partner with others are also included, and the phraseology
has been modified.

The Commissioners have considered that the provisions of the Act of
1889 might well be extended in this way. Very often the testator is en-
gaged in a profitable business and its incorporation will obviously be of
great benefit to the cestuis que trust interested in the estate, or when the
decedent dies intestate the interests of his minor children can best be
conserved by an incorporation of the business. In the present state of the
law this cannot be done by trustees or guardians without possible risk to
them personally; and in cases of a partnership dissolved by death, where
the partnership articles do not sufficiently protect the estate of the deceased
partner, a forced liquidation may be disastrous.

As the incorporation must be effected under the supervision of the court,
it is conceived that the interests of all parties concerned will be properly
safeguarded.

533. APPROVAL OF ORPHANS' COURT NECESSARY ;
PROCEDURE.

(6) No such corporation shall be organized without the ap-
proval of the orphans' court having jurisdiction of the accounts
of such fiduciaries first had and obtained, upon petition filed
setting forth all the facts and circumstances and the proposed
terms and conditions of the organization. Such notice as shall
be prescribed by said court shall be given to all persons having
any beneficial interest, vested or contingent, in the estate of the
decedent, who are in being at the time of the filing of such
petition ; and the said court shall approve such organization only
after inquiring into the circumstances and the proposed terms and
conditions of such organization, aided, if necessary, by the re-
port of a master, and only with the written consent of all persons
interested who shall be sui juris, and of the guardians or com-
mittees of such as shall be under age or non compos mentis



FIDUCIARIES ACT SECTIONS 42 (&), (c)-43 407

NOTE. In this clause, the phraseology has been altered and the pro-
visions of the Act of 1889 for the appointment of special guardians or
committees in such proceedings and for the consent of the husbands of
persons interested have been omitted.

534. HOW STOCK SHALL BE HELD; VOTING
STOCK.

(c) The stock of any such corpqra<tioni issued) to such
fiduciaries shall be held by them for the same uses, trusts and
persons as the estate and property were held before the organiza-
tion of such corporation; they shall have the same right and
power to vote such stock, subject to the same control by the
court, as prescribed by Section 43 of this act regarding shares
of stock belonging 1 to the decedent ; and they shall have the right
to sell such stock under the direction of the court.

NOTE. In this clause, "the stock of any such corporation issued to such
executors," etc., has been substituted for "the whole of the proceeds of the
trust estate, whether contributed or sold, and whether paid for by shares
or money," and the provisions as to voting and sales have been added.

535- VOTING OF STOCK IN CORPORATIONS BY
FIDUCIARIES.

SECTION 43. Fiduciaries, whether appointed by last will and
testament or by decree of the orphans' court, shall have the same
right and power, either in person or by proxy, at all corporate
meetings, to vote any and all shares of stock, held by them in a
fiduciary capacity, in any corporation organized under the laws
of this commonwealth, as the deceased, or legal owner thereof
had in his lifetime. And where such stock is registered on the
books of such corporation in the name of, or has passed by opera-
tion of law or by virtue of any last will and testament to more than
two fiduciaries, and dispute shall arise among them, the said shares
of stock shall be voted by a majority of such fiduciaries, and in
such manner and for such purposes as such majority shall author-
ize, direct or desire the same to be voted. If the number of
fiduciaries shall be even and they shall be equally divided upon
the question of voting such stock, it shall be lawful for the
orphans' court having jurisdiction of their accounts, upon petition
filed by any of such fiduciaries or by any party in interest, to
direct the voting of such stock in the manner which, in the opinion
of said court, will be for the best interests of the parties bene-
ficially interested in the stock.



408 FIDUCIARIES ACT SECTIONS 43-44 (a), (&)

NOTE. This is Section i of the Act of March 16, 1905, P. L. 42, 5 Purd.
5890, altered by substituting "fiduciaries" for "executors, administrators,
guardians and trustees," and "the orphans" court" for "the proper court,"
and by omitting, after "lifetime," in line 8, the words, "or during his
legal ownership thereof," which seem not to apply to trusts within the
scope of the present draft.

The Act o{ 1905 is apparently intended to include trustees appointed by
the common pleas, though it makes no provision as to trustees appointed
by deed. The act should be repealed only so far as relates to fiduciaries
who are within the scope of the present act

The expression "any corporation in this commonwealth or organized
under the laws of the same" has been changed to "organized under the
laws of this commonwealth," and "certified, or stands on the books" has
been changed to "registered on the books." The last sentence is new.

536. LIABILITY OF EXECUTORS AND ADMINISTRA-

TORS FOR INTEREST, WHEN LIABLE.

SECTION 44. (a) No executor or administrator shall be liable
to pay interest but for the surplusage of the estate remaining in
his hands or power when his accounts are or ought to be filed:
Provided, That nothing herein contained shall be construed to
exempt an executor or administrator from liability to pay interest,
where he may have made use of the funds of the estate for his
own purposes.

NOTE. This is Section 17 of the Act of March 29, 1832, i Purd. 1125
(Section 18 of the Commissioners' Draft). It was derived, as to the first
sentence, from Section 6 of the Act of March 27, 1713, i Sm. L. 81, which,
however, included the words "guardian or trustee" The proviso was
new in the Act of 1832.

The Commissioners of 1830 reported that this section ought not to in-
clude guardians or trustees, "inasmuch as they are liable for interest upon
entirely different principles, and not merely after the period when their
accounts 'are or ought to be settled.' "

The changes now made are: to substitute "filed" for "settled and ad-
justed," to omit "in the register's office," after "filed;" and to omit, at
the end, "previously to the time when his accounts are or ought to be
filed as aforesaid."

537. RATE OF INTEREST.

(b) The amount of interest to be paid in all cases by
fiduciaries shall be determined by the orphans' court, under all the
circumstances of the case, but shall not, in any instance, exceed
the legal rate of interest for the time being.

NOTE. This is Section 18 of the Act of March 29, 1832, i Purd. 1126
(Section 19 of the Commissioners' Draft), which was new in that act.



FIDUCIARIES ACT SECTIONS 44 (&)-4S 409

The only change is to substitute "fiduciaries" for "executors, administra-
tors and guardians."

538. SAME PERSON SHALL NOT RECEIVE COMMIS-
SIONS AS EXECUTOR AND TRUSTEE.

SECTION 45. In all cases where the same person shall, under a
will, fulfill the duties of executor and trustee, it shall not be law-
ful for such person to receive or charge more than one commission
upon any sum of money coming into or passing through his hands,
or held by him for the benefit of other parties; and such single
commission shall be deemed a full compensation for his services
in the double capacity of executor and trustee: Provided, That
any such trustee shall be allowed to retain a reasonable commission
on the income he may receive from any estate held by him in trust
as aforesaid.

NOTE. This is Section I of the Act of March 17, 1864, P. L. 53, I Purd.
1127.

The words "income" and "estate" are substituted for "interest" and
"sum" in the last two lines.

Where the will directs the executors to pay over to the trustees all
dividends, interest and returns of principal as received, so that the tes-
tator himself must have contemplated that, before making disbursements
of income, the trustees would deduct their lawful commissions thereon, and
where an allowance of trustees' commissions on income at 5 per cent, is
not excessive for the services rendered, it is immaterial to the cestuis que
trust whether one trustee retained all the commissions credited against
income or divided them with his co-trustee, who, as executor received a
part of the commissions allowed the executors on the same income, and
the court will allow the trustees credit for the full amount of such com-
missions.

"It may well be doubted if the Act of March 17, 1864, P. L. S3, or the
succeeding act, section 45 of the Fiduciaries Act of June 7, 1917, P. L. 447,
511, applies to income, although it goes without saying that under ordinary
circumstances, where an accountant is both executor and trustee, he
would be allowed but one commission on income collected. The question
would not have arisen if the executors, had, as is customary, distributed
the income direct to the life-tenants ; but they were prevented from doing
this by the language of the will, which, by the seventh paragraph thereof,
directs the executors to pay over to the trustees all dividends, interest and
returns of principal as received, so that the testator himself must have
contemplated that, before making disbursements of income, the trustees
would deduct their lawful commissions thereon. Assuming, therefore,
as we must fromi the record before us, that an allowance of commissions
on income at 5 per cent, is not an excessive allowance for the services
rendered, it is, as pointed out by the auditing judge, immaterial to the



410 FIDUCIARIES ACT SECTIONS 45-46 (a)

cestuis que trust whether the Fidelity Trust Company retained all the
commissions credited against income or divided them with its co-trustee.
GUMMEY, J., in Merchant's Est, 30 Dist. 92.

539. ACCOUNTS OF EXECUTORS, ADMINISTRA-
TORS AND TRUSTEES, ACCOUNTS OF EX-
ECUTORS AND ADMINISTRATORS TO BE
FILED IN SIX MONTHS; MAY BE CITED TO
ACCOUNT AT END OF SIX MONTHS.

SECTION 46. (a) It shall be the duty of every executor and
administrator to file in the register's office a just account of the
administration of the estate at the expiration of six months from
the time of administration granted or when thereunto required
by the orphans' court, and any executor or administrator ma>
be cited to file his account, after the expiration of six months
from the date of issuance of letters testamentary or of administra-
tion, on petition of any person having an interest, present or
future, vested or contingent, in the estate of the decedent, or on
petition of any creditor of the decedent.

NOTE. The first part of this clause is derived from Section 15 of the
Act of March 15, 1832, P. L. 139, i Purd. 1089, but the period is reduced
from one year to six months, "at the expiration of" is substituted for
"within," 1 and "required by the orphans' court" for "legally required."
The remainder of the clause is new, is declaratory of the existing law,
and embodies the provisions of the first part of Section i of the Act of
April 17, 1869, P. L. 70, i Purd. 1138, which enables the owner of any
contingent interest in the personal property of any decedent to require
an executor or administrator to file his accounts.

The remainder of that section, enabling the owner of a contingent interest
to require the legatee of any previous interest in the same property to give
security, is covered by Section 23 of the present draft. (See 469 supra.)

Formerly the term of one year was perhaps a convenient period for
filing an account, but under modern conditions of rapid communication
and transportation, it is no longer necessary or advisable. The majority
of estates can now be settled by the end of six months, and it is often a
great hardship to legatees and creditors to compel them to wait for a full
year before their just claims can] be satisfied. And where the estate is so
complicated that a final account cannot be rendered at the end of six
months, a partial account may be filed, debts paid or at least ascertained
with some degree of certainty, and the will construed by the court at the
audit of the account.

The Commissioners are of opinion that this shortening of the term will
be of great advantage.



should apparently be "in."
See form 81.



FIDUCIARIES ACT SUCTION 46(0) 411

The court will not open a duly filed and confirmed administration ac-
count on the petition of a next of kin and a creditor, who failed to give
written notice of their claims to the accountant as required! by Section 46,
(c), of the Fiduciaries Act, 1917, P. L. 447, and who had notice of the
filing of the account from one other than the accountant, on the ground
that the administrator had not given them actual notice of the filing of
the account.

Interested parties, who request it, should have ample notice of the time
and place of the application for the appointment of an auditor to distribute
the balance on an administration account. Morthland's Est., 32 York 137.

The provision of the Fiduciaries' Act requiring an accounting by execu-
tors, etc. at the expiration of six months, does not apply where decedent
died prior to the passage of the Act. Amodei's Est., 27 Dist. 373.

Except in the case of an administration pendente lite or de bonis non,
an account of an executor or administrator filed before the expiration of
six months from the grant of letters is premature, and distribution, if
made, is at the risk of the accountant, although six months have elapsed
between the death of the decedent andi the date of audit.

"The section of the Fiduciaries Act of 1917 above quoted now takes the
place of section 15 of thq Act of March 15, 1832, P. L,. 135, and reduces
the time for filing an account from one year to six months ; but the reason-
ing of the judge who filed the opinion in Clemen's Estate (21 Dist. 175),
applies with greater force to the present act, in which the words "at the
expiration of" are substituted for the word "within." In order, however,
that any question as to the proper time for the filing of an account might
be set at rest, we incorporated in Rule II of this (Phila.) court the
following section:

"i. Accounts of executors and administrators will not be audited unless
filed after the expiration of six months from the date of the grant of
letters testamentary or of administration, except in the case of administra-
tions pendente lite and administrations de bonis non, where more than
six months have elapsed since the granting of the original letters."

The reasons for excepting administrations pendente lite and those de
bonis non are set forth in Clemens's Estate, 21 Dist. R. 175, and if authority
is needed for our right to make this matter the subject? of a rule of court
(which counsel seemed to doubt) it is to be found in section 10 of the
Orphans' Court Act of 1917, and in McGreevy v. Kulp, 126 Pa. 97 ; Gannon
v. Fritz, 79 Pa. 303, and numerous other cases." GUMMEY, J., in Hayden's
Est., 28 Dist. 39.

"Under the Act of March isth, 1832, P. L. 139, Pur. Dig., page 1089,
an executor or administrator was required to file "a just account and
settlement of," the "goods, chattels and credits" of the deceased, "in one
year, or when thereunto legally required." In the Commissioners' note to
Sec. 46 (a) of the Fiduciaries Act of 1917, it is inadvertently stated that
in this section of the Act of 1832, the word "within" is used, but it is
intended doubtless to refer to Section 24 of the Act, Purd. Dig., page 1078,
where the form of the condition of the fiduciary's bond is prescribed, which
includes an obligation to account "within one year" from its date, or when
thereunto legally required. Under Sec. 38 of the Act of 1832, Purd. Dig.



4I2 FIDUCIARIES ACT SECTION 46 (a)

page 1 130, no distribution could be enforced "until one year be fully expired
from the granting of the administration of the estate." In construing this
statute, in Raestaetter's Estate, 15 Sup. Ct., 549, that court held that the
words "in one year," meant "at the expiration of one year." It was the
practice in this court prior to the passage of the Fiduciaries Act of 1917,
to audit accounts filed within a year after letters were granted .at any
time fixed for the audit of cases after the expiration of a year from the
grant of letters; in other words, this court did not rule that an account
could not be filed within the year, but that, if so filed, it could be audited
after the expiration of a year from thei grant of letters.

The law respecting the matters involved in this adjudication has been
altered by the Fiduciaries Act of 1917 as shown by the following pro-
visions in the several sections of the Act which are cited. There must be
a bond, conditioned, inter alia, for an accounting "at the expiration of six
months from its date" 8 (o) ; a just account of the administration of the
estate filed in the Register's office 46 (d) ; "at the expiration of six months
from the time of administration granted, or when thereunto legally re-
quired" 46 (a) ; and there is a prohibition against compulsory distribution
"until six months be. fully expired from the granting of the letters testa-
mentary or of administration in the estate" 49 (o). An account filed with
the Register of Wills at the expiration of six months from the grant of
letters, under 46 (rf) will be transmitted by him to the orphans' court
at its next stated meeting after the account is filed, not less than thirty
days distant at the time of filing the account, and, after advertisement for
four weeks, it will be presented to said court for confirmation. In
counties where separate orphans' courts are established, "all accounts
filed in the office of the Register of Wills, or in the orphans' court, by
fiduciaries, shall be examined and audited by the court" 47 (b) ; and, if
a creditor, who has notified the fiduciary of his claim and has received
notice of the filing of the account, does not present his claim, "at an audit
held not less than six months after the grant of letters testamentary or of
administration," duly advertised as required in Sec. 10, he will not be en-
titled to receive "a share of the assets distributed in pursuance of such
audit, whether the estate be solvent or insolvent" 49 (d). Under 47 (a)
the judges of the orphans' court have power and authority "to establish
in their discretion such rules and regulations as they may deem proper,
for the publication of advertisements of notices of the auditing of ac-
counts of fiduciaries * * * as well as by special order in particular
cases, as by general rules."

Now, when it is required of a fiduciary, deriving his powers and
authority from letters granted by the Register of Wills, to file an account
at the expiration of six months, and of the Register of Wills that he
advertise that account for four weeks and transmit, after the advertisement
thereof, to the orphans' court for confirmation at its next stated meeting
after it is filed, being not less than thirty days distant from the time of
filing, it cannot be argued from the sections of the Fiduciaries Act relied
upon in coming to the conclusion in this case, that the fiduciary can volun-
tarily file his account within six months from the grant of letters, or, that
there can be an audit and confirmation immediately after the expiration of



FIDUCIARIES ACT SECTION 46 (a), (6) 413

six months from the grant of letters. Creditors and all parties interested
in the distribution are entitled to the Register's published notice of the
filing of the account at the expiration of the statutory period required for
administration, and when the protection afforded by these sections of the
Act herein referred to is invoked, there must be a strict compliance there-
with before there can be an exercise of the judicial functions of audit and
final confirmation necessary to make a decree binding upon them."

Cooper's Est. 29 Dist. 230, 67 P. L. J. 17; 36 Lane. 266, 20 Lack. 46,
32 York, 145.

One who has a prima facie claim against the estate of a decedent is
entitled to require an account by personal representatives.

The orphans' court will not deny a creditor of a decedent the right to
proceed to have his claim adjudicated in that court and relegate him to
his common law action.

"The question presented is whether the petitioner has sufficiently shown
himself to be a creditor so as to be entitled to compel the filing of an
account. The rights of creditors seem to be the same under the Fiduciaries
Act as they were under the prior existing law. * * *

In any event the right of a creditor to proceed in the orphans' court
seems to be concurrent with his right to proceed by a common law action.
Philip's Administrator v. Railroad Company, 107 Pa. 465. We know of
no case which holds that the court may relegate a creditor to his common
law action and deny him the right to proceed to have his claim adjudicated
at the orphans' court.

We are, therefore, of opinion that the petitioner is entitled to require
the filing of an account." Laverty's Est., 50 Pa. C. C. 259, 24 Dauphin
107, 30 Dist. 507.

540. ORPHANS' COURT MAY APPOINT EXAMINERS
TO MAKE EXAMINATIONS OF ASSETS IN
HANDS OF FIDUCIARIES.

(b) The several orphans' courts of this commonwealth shall
have power, by general rule or special order, to appoint one or
more examiners to make periodical or special examinations of the
assets of estates in the hands of fiduciaries, and power 1 to require
all persons in whose custody or control such assets may be held,
to present them for such examination. The examiners so ap-
pointed shall be compensated by reasonable fees to be fixed by the
court and to be paid out of the respective estates.

NOTE. This is a new section.

At present the orphans' court has not explicitly been given this general
power, and the deplorable cases of embezzlement, especially by trustees,
that occur from time to time have induced the Commissioners to recom-
mend this provision as at least a partial preventive.



414 FIDUCIARIES ACT SECTION 46 (c), (<f)

541. CLAIMANTS WHO HAVE NOTIFIED EXECU-
TORS, ADMINISTRATORS OR TRUSTEES TO
BE ENTITLED TO RECEIVE ACTUAL NOTICE
OF FILING OF ACCOUNTS.

(c) The several orphans' courts of this commonwealth shall
by general rule provide that any person who, claiming to be in-
terested in the estate of any decedent as creditor, legatee, next of
kin or otherwise, has given written notice of his claim to the exec-
utor, administrator or trustee, or his attorney, shall be entitled
to receive actual notice from said executor, administrator or
trustee, or his attorney, of the filing of his account ; or such rule
of court may provide for the filing of such claims with, and the
giving of notice by, the register of wills or the clerk of the
orphans' court.

NOTE. This is a new clause.

The attention of the Commissioners has been called by numerous sug-
gestions from members of the Bar to the advisability of a provision of
this nature. It is certainly fair and conducive to an orderly procedure in
the settlement of decedents' estates that a creditor or other person in-
terested, who has given notice of his claim, should be apprised of the filing
of the account. The Commissioners are of opinion that it is better to
provide for the procedure by 1 rules of court than by a peremptory statute,
as the comparative elasticity of rules of court will enable the court to
arrive at a just result in each particular case.

The court will not open a duly filed and confirmed administration ac-
count on the petition of a next of kin and a creditor, who failed to give
written notice of their claims to the accountant as required by Section 46,
(c), of the Fiduciaries Act, 1917, P. L. 447, and who had notice of the filing
of the account from one other than the accountant, on the ground that
the administrator had not given them actual notice of the filing of the
account.

Interested parties who request it, should have ample notice of the time
and place of the application for the appointment of an auditor to distribute
the balance on an administration account. Morthland's Est., 32 York 137.

542. REGISTER'S DUTIES AS TO TRANSMISSION
AND ADVERTISING OF ACCOUNTS; EX-
PENSES.

(cf) Every register, with whom an account has been or shall



Online LibraryRaymond Moore RemickThe statutory law of decedents' estates in Pennsylvania, with annotations and forms → online text (page 44 of 71)