In Re Estate of DeRoy

392 A.2d 1355, 481 Pa. 403, 1978 Pa. LEXIS 1059

• Court: Supreme Court of Pennsylvania
• Decided: October 6, 1978
• Docket: 73
• Status: Published

Opinions

OPINION OF THE COURT

MANDERINO, Justice.

This appeal is brought by Jean DeRoy Aronson, the adopted daughter of Joseph DeRoy, deceased. Appellant claims the corpus of a testamentary trust set up for the benefit of her adoptive parents. The court below held that she was not entitled to the corpus of the trust because she was precluded by previous litigation. We believe the court below erred and we therefore reverse.

The testator, Joseph DeRoy, executed his last will and testament on May 25,1918, and died shortly thereafter. By the terms of the will, a trust of one-eighth of the residuary estate was created for one of testator’s sons, Israel DeRoy. The paragraph of the will so providing was paragraph NINTH(f), which reads in relevant part:

“(f) The equal one-eighth (Vs) part of said rest, residue and remainder of my estate I give, devise and bequeath unto my sons, Abraham J. DeRoy, and Al J. DeRoy, IN TRUST, HOWEVER, for the following uses and purposes, that is to say, in trust to . [pay the net income] monthly to my son, Israel DeRoy, during the term of his natural life. . . . Upon the decease of my said son, Israel DeRoy, the principal of said trust fund and any accrued income then on hand shall be divided in equal proportions share and share alike among the children of my said son, Israel DeRoy, or their issue, per stirpes and not per capita; should none of the children of my said son, Israel DeRoy, nor their issue, be living at the time of his decease, then and in that event the said equal one-eighth part of the residue of my estate and any accrued income then on hand shall continue to be held by my said sons, Abraham J. DeRoy and Al J. Deroy, IN TRUST, HOWEVER, for the following uses and purposes, that is to say, in trust ... [to pay the net income] monthly to my daughter-in-law, Helen Goldman DeRoy, during the term of her natural life. . . . Should none of the children of my said son, Israel DeRoy, nor their issue, nor my said daughter-in-law, Helen Goldman DeRoy, be living at the time of the decease of my said son, Israel DeRoy, then and in that event the principal of said trust fund and any accrued income then on hand shall revert to my estate and be distributed in accordance with the intestate laws of the State of Pennsylvania. Should my said daughter-in-law, Helen Goldman DeRoy, be living at the time of the decease of my said son and become the beneficiary of said trust fund for the term of her natural life as above set forth, then and in that event upon the decease of my said daughter-in-law the principal of said trust fund and any accrued income then on hand shall revert to my estate and be distributed in accordance with the intestate laws of the State of Pennsylvania.”

Israel DeRoy and his wife, Helen Goldman DeRoy, had no children of their own but did, in April of 1921, adopt Jean Lois DeRoy (appellant) who was then four years of age. On January 28, 1933, Israel DeRoy died and in March of that year the trustees filed their first account. An audit hearing on the account was then held at which a principal question was whether the trustees should distribute the trust principal to Jean Lois DeRoy as “children” under paragraph NINTH(f) of the will, supra, or retain the funds in trust and distribute the income to Helen Goldman DeRoy as dictated by the will (should Israel DeRoy die without leaving children or issue of children surviving). The orphans’ court appointed a guardian ad litem to represent the interests of Jean Lois DeRoy, who was then a minor 16 years of age. Following submission to the court of the guardian’s “Report and Opinion”, the auditing judge entered a decree nisi dated May 24, 1933, ordering that the trustees distribute the trust income to Helen Goldman DeRoy for “purposes specified in will.” No exceptions were filed to the decree nisi, which therefore became the final decree of the orphans’ court upon the expiration of ten days. No appeal was taken from the final decree.

For over 40 years, until her death in 1974, the income of the trust was paid to Helen Goldman DeRoy. Mrs. DeRoy’s death prompted the filing by the surviving trustee of a final account in March of 1975. Jean Lois DeRoy, now by marriage Jean DeRoy Aronson, thereupon filed a claim for the balance of principal of the trust. After two hearings the auditing judge ordered that the trust principal be distributed to the intestate heirs of Joseph DeRoy. Appellant took timely exceptions to the decree nisi, which were dismissed by the court en banc, and this appeal followed.

Critical to the orphans’ court’s 1933 determination was the question of whether the term “children”, as employed in paragraph NINTH(f) of Joseph DeRoy’s will (“should none of the children of my said son, Israel DeRoy, nor their issue, be living” at the time of Israel’s death), included adopted children or whether it was restricted to the natural offspring of Israel DeRoy. The report of the guardian ad litem who then represented the interest of Jean Lois DeRoy included the following observations of the applicable law:

“In this particular case, it is to be noted that Joseph DeRoy died on December 12, 1918, and that Jean Lois DeRoy was adopted by Israel DeRoy and Helen Goldman DeRoy, his wife, by Decree of Adoption dated February 3, 1921. Jean Lois DeRoy is, therefore, clearly not a child ‘adopted before the date of the will.’ My conclusion from the wording of the above mentioned section of the Wills Act [Section 16(b) of the Wills Act of June 7, 1917, P.L. 403] is, therefore, that the Will of Joseph DeRoy, must be so construed in accordance with this statutory canon of construction to exclude the gift over to any adopted child of Israel DeRoy.

* * * * *

“In our case the testator’s death occurred after 1917, but the statutory canon of construction can not benefit Jean Lois DeRoy because she was not adopted before the date of the Will. Hence, the ordinary rules of construction govern the interpretation of Joseph DeRoy’s Will. These ordinary rules of construction to arrive at the testator’s intention as set forth in the decision above quoted give the words ‘child or children or issue’ their natural meaning, thus excluding any adopted children. Since Joseph DeRoy wrote his Will and died before Jean Lois DeRoy was adopted, he could not have intended that this adopted child of his son should share in his estate. The conclusion is, therefore, inescapable that Jean Lois DeRoy can not take under the will of Joseph DeRoy, deceased.”

The orphans’ court agreed and, as set forth above, ordered the trustees to pay the income of the trust to Helen Goldman DeRoy. This conclusion was in accord with the law of the Commonwealth as it existed in 1933. See, the Wills Act of June 17, 1917, P.L. 408, Section 16(b); Yates Estate, 281 Pa. 178, 126 A. 254 (1924); Puterbaugh’s Estate, 261 Pa. 235, 104 A. 601 (1918).

Appellant asserts that she is now entitled to distribution of the full balance of the account under the authority of Tafel Estate, 449 Pa. 442, 296 A.2d 797 (1972) (plurality opinion) wherein it was held that adopted children were presumed to be included in a testator’s bequest or devise to his “child” or “children” (even though, as here, adopted subsequent to the execution of the will) unless a contrary intention appeared. See also Estate of Flinn, 479 Pa. 312, 388 A.2d 672 (1978); Estate of Sykes, 477 Pa. 254, 383 A.2d 920 (1978). The cases cited reflect a change in the thinking of this Court as to the presumptions which are applicable in determining whether an adopted child takes under a will or trust. It is now settled in Pennsylvania that in the absence of a clearly expressed intent to the contrary, the word “children” in a bequest or devise of the principle of a trust to a life tenant’s children includes children adopted by the life tenant while they were minors, even though adopted after the death of the testator.

We conclude that the 1933 decree is not a bar to Jean DeRoy Aronson’s present attempt to have the corpus of the trust distributed to her as a child of testator’s son, Israel DeRoy.

“ ‘[T]he rule of estoppel does not extend . . . the law which was applied in . [an] earlier distribution to . . . [a subsequent] distribution. Though the decree in the first may have rested on a mistaken application of a rule of law, a circumstance which can only be inquired into on appeal, so long as the decree stands it is conclusive with respect to all rights in the fund distributed; but it cannot be made the basis of an estoppel when another distinct fund is to be distributed though it be part of the same estate.’ ” (emphasis added).

Arrott Estate, 421 Pa. 275, 281, 217 A.2d 741, 745 (1966), quoting Kellerman Estate, 242 Pa. 3, 12, 88 A. 865, 868-69 (1913). Accord, Brown Estate, 408 Pa. 214, 229-31, 183 (1962); Reamer Estate, 331 Pa. 117, 120-24, 200 A. 35, 37-38 (1938); cf. Catherwood Trust, 405 Pa. 61, 173 A.2d 86 (1961).

Based on a rule of law that existed in 1933, the orphans’ court then ordered that the income of the trust be distributed to Helen Goldman DeRoy. The principle of the trust was to remain with the trustees. In the final accounting, in 1975, the orphans’ court ordered distribution of the principle of the trust. Because the rule of law on which the 1933 court based its order no longer accurately stated the law of this Commonwealth, “it was the duty of the auditing judge [in the 1975 accounting] to require that the present allocation be controlled by the law in effect at the time of the [1975] audit.” Arrott Estate, supra 421 Pa. at 281, 217 A.2d at 745. A previous “rule of law made in the distribution of a portion of an estate is not binding . . . in a subsequent adjudication relating to another portion” (emphasis added) Id., 421 Pa. at 280, 217 A.2d at 744. See also, Brown Estate, supra 408 Pa. 214, 230, 183 A.2d 307, 315 (1962) “(. . . because a ruling of law by an Orphans’ Court upon the distribution of a portion of an estate is not binding upon the Court in a subsequent adjudication relating to another portion of the same estate, the broad general principle of res judicata does not apply.” (emphasis added), and Reamers Estate, 331 Pa. 117, 120-121, 200 A. 35, 37 (1938). (“It has consistently been held that a ruling of law by an orphans’ court in dealing with the distribution of a portion of an estate is not binding upon a subsequent adjudication relating to another portion”) (emphasis on original).

Likewise, the Restatement of Judgments, Section 70 (1948 Supp.), notes that the determination of a question of law is not conclusive between the parties in a subsequent adjudication on a different cause of action “. . . if it would be unjust to one of the parties or to third persons to apply one rule of law in subsequent actions between the same parties and to apply a different rule of law between other persons.” Id., Section 70, Comment F.

The law as now stated by Estate of Flinn, supra, 479 Pa. 312, 388 A.2d 672 (1978), Estate of Sykes, supra, 477 Pa. 254, 388 A.2d 920 (1978), and Tafel Estate, supra, 449 Pa. 442, 296 A.2d 797 (1972) (plurality opinion), would require the orphans’ court to distribute to appellant the principle of any trust established by language such as that used by testator in this case. It would obviously be unjust to apply that rule of law to adopted children other than appellant while adhering to the former rule when called upon to decide how the principle of the instant trust should be distributed.

Testator in the instant case provided for a distribution of the residue of his estate to be made in equal one-eighth parcels. Each parcel was given, either outright or in trust, to one of testator’s eight surviving children. In those cases where the one-eighth share was put in trust for testator’s child, a gift of the remainder of that one-eighth share was made to their “children” or “issue” should testator’s children predecease him. In those cases where the one-eighth share was given absolutely, the gifts were made to the beneficiary “. . . and his heirs.” Clearly, therefore, testator intended to bestow upon each of his eight children an equal portion of the residue of his estate. The manner in which each was to receive that one-eighth share varied to the extent that four of his sons were to receive their shares absolutely while his remaining son, and each of his three daughters received their shares in the form of a trust. The income of each one-eighth share was payable to each of them for life and upon their respective deaths, the principle of each one-eighth share was to be divided equally among their respective children per stirpes. Only in those cases where testator’s children died without leaving “children” or “issue” surviving did testator provide that the one-eighth share given to such child should either go to that child’s husband or wife as the case might be, or revert to testator’s estate. This distribution scheme clearly indicates testator’s intent to bestow the principle of these trust funds upon the children of his one son and three daughters for whom trust incomes for life were established by the will. Applying the rule of law as stated by the orphans' court in its adjudication in 1933 to appellant now would thwart that distribution scheme. Applying that law would cause the child of one of testator’s eight children (appellant) to receive nothing under the will while the children of the other children of the testator for whom trust funds were established would receive their respective shares of their parents’ trusts. The injustice of such an application of the prior law is obvious, and is certainly not a result expressly compelled by testator’s will.

We have reviewed other issues raised and conclude they are without merit.

For these reasons, we reverse the decree of the orphans’ court and order that the principal (and any accrued income) of the trust fund established in paragraph NINTH(f) of Joseph DeRoy’s will be distributed to appellant Jean DeRoy Aronson in conformity with this opinion.

ROBERTS, J., concurred in the result. POMEROY, J., filed a dissenting opinion in which EAG-EN, C. J., and O’BRIEN, J., join.