Fownes Trust

220 A.2d 8, 421 Pa. 476, 1966 Pa. LEXIS 689

Opinions

Opinion by

Mb. Chief Justice Bell,

The question involved is this:

Is the adopted son of one of the children of the life tenant entitled to a share of income under this inter vivos trust?

The Orphans’ Court

Footnotes

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* held that the adopted son of Settlor’s deceased grandson was not “issue” within the meaning of the trust and hence was not entitled to any income thereunder.

On December 7, 1933, Henry C. Fownes, as SettlorGrantor, and his two sons as Trustees, executed an irrevocable deed of trust. The trust was composed of stocks and bonds** which the Settlor owned and trans ferred to the Trustees. In the second paragraph of the trust, Settlor pertinently provided as follows:

' “(a) The Trustees shall pay . . . the net income of the trust estate to Amy Fownes Schaeffer, daughter of Grantor, during her life.

“(b) Upon the death of said Amy Fownes Schaeffer the Trustees shall pay . . . the net income of the trust estate, share and share alike, to the children of said Amy Fownes Schaeffer who survive her and to the issue per stirpes of any child who may have predeceased her or not having predeceased her may die before the termination of the trust herein created. . . .

“(c) The Trustees shall have full power and authority in their discretion to distribute to said Amy Fownes Schaeffer and after her death to any other beneficiary hereunder from time to time a portion or portions of principal in addition to income provided for to the end that said Amy Fownes Schaeffer and after her death any other beneficiary hereunder, may receive sufficient sums for maintenance in comfort and security with due provision for sickness or emergency of any kind.

“(d) This Trust shall terminate twenty one years after the death of the last survivor of the children now living of said Amy Fownes Schaeffer and the Trustees shall thereupon divide the principal of the trust estate remaining after all proper charges as herein provided for and pay the same share and share alike among the grandchildren and the issue per stirpes of any deceased grandchild of said Amy Fownes Schaeffer.

“(e) In the event that said Amy Fownes Schaeffer dies leaving no grandchildren nor issue of deceased grandchildren the trust shall terminate upon her death and the Trustees shall pay the principal to the heirs at law of the Grantor at the time of such distribution.”

Fownes, the Settlor, died September 27, 1985. His daughter Amy, the life tenant, died January 4, 1986. The trust was to continue until twenty-one years after the death of the last survivor of Amy’s children who were living when the deed was executed. Amy had four living children, who were living at the death of both the Grantor and Amy — two daughters and two sons. At the time of the present accounting in 1964, two of Amy’s children were living — two daughters, each of whom had three living children. Amy also had had two sons, John and Thomas, each of whom survived her, but John died in 1963 and Thomas in 1964. Neither son had any natural born children, but each had an adopted son, who are the claimants herein.

Amy’s son John, on December 20, 1943, adopted a son, John Barnes, III, the present appellant, who was born October 20, 191¡8. On April 15, 1959, Amy’s son Thomas adopted his stepson, Kirk Swing, who was born June 16, 1926.

Prior to the Estates Act of April 24, 1947, P. L. 100, 20 P.S. §301.1 et seq., if a gift was made by an inter vivos deed, the law was long and well established that children and grandchildren meant natural children and grandchildren, and issue meant issue of the body, in the absence of language in the deed showing a contrary intent. In other words, such a gift did not include an adopted child or adopted grandchild or adopted issue. Storb Appeal, 400 Pa. 567, 571-572, 163 A. 2d 302. The same interpretation and principle is enunciated in Rowlett Estate, 366 Pa. 293, 297, 77 A. 2d 390; Holton Estate, 399 Pa. 241, 248, 159 A. 2d 883 (and eleven cases cited therein); and in Tower Estate, 410 Pa. 389, 189 A. 2d 870.

Storb Appeal, supra, clearly and succinctly stated the rule which was adopted by all of the aforesaid cases, viz.: “Prior to the passage of the Acts of 1947,* supra, an adopted child was not considered to be embraced within the word ‘issue’. In Howlett Estate, supra [366 Pa.], the testator . . . created a trust with life estates to his children and then to a child’s issue, or, in default of issue, to surviving children and the issue of deceased children. During the term of the trust a son died leaving no natural born children but a daughter who had been adopted in 1897. Ruling that this adopted daughter of the deceased son was not entitled to take as ‘issue’, this Court stated (p. 297) : ‘ “Issue” is not synonymous with “children”. “Issue” means issue of the body, offspring, progeny, natural children, physically born or begotten by the person named as parent: [citing cases].’ ”

Furthermore, we believe that the language in Fownes’ deed of trust clearly evidenced an intention to benefit his blood line and only his blood line, namely, his daughter Amy and her surviving children or the issue per stirpes of any of her children who may have predeceased her, or not having predeceased her, died before the termination of the trust. It was only in default of grandchildren or issue of grandchildren living at Amy’s death that the principal was to go to the heirs at law of the Grantor living at the time of Amy’s death.

As Judge Cox said in his able Opinion: “Only one conclusion is possible from this distributive scheme, that is, that the Grantor intended to give trust income and trust principal to those of his blood line only, except in the event his blood line should fail, and that he did not intend, therefore, that the blood line classes to whom he gave trust income and trust principal should include adoptees. The Grantor did not, therefore, intend to include John Barnes, III or Kirk SAving, adopted sons of John Barnes, Jr. and Thomas Barnes, II, (sons of the Grantor’s daughter, Amy Fownes Schaeffer) within the class, ‘the issue per stirpes of any child (of Amy Fownes Schaeffer) who may have predeceased her or not having predeceased her may die before the termination of the trust herein’ ”.

This case under the language of this trust is clearly distinguishable from Collins Estate, 393 Pa. 195, 142 A. 2d 178, where the crucial word involved was “descendants”.

We are convinced that the interpretation by the Orphans’ Court of this deed of trust was correct, and that children adopted by Amy’s children have no rights under said deed.

Decree affirmed, at appellant’s cost.

Sur a trustees’ filth and partial account, which was filed shortly after the death of one of the children of the life tenant.

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These assets are now carried at approximately two million dollars.

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and in pertinent situations prior to other legislative Acts, such as the Wills Act, Act of June 7, 1917, P. L. 403, |16(a).