In Re White

484 A.2d 763, 506 Pa. 218, 1984 Pa. LEXIS 346
CourtSupreme Court of Pennsylvania
DecidedNovember 20, 1984
Docket18 and 19 M.D. Appeal Docket 1984
StatusPublished
Cited by14 cases

This text of 484 A.2d 763 (In Re White) is published on Counsel Stack Legal Research, covering Supreme Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re White, 484 A.2d 763, 506 Pa. 218, 1984 Pa. LEXIS 346 (Pa. 1984).

Opinions

OPINION

ZAPPALA, Justice.

Before this Court is a review of the Superior Court order reversing the order of the lower court granting the petition of Juniata Valley Bank to resign as a corporate trustee1 [221]*221and denying a petition to remove Raymond White as an individual trustee.

By an agreement dated December 13, 1965, C.A. White and Flo B. White, his wife, created an inter vivos trust naming their thirteen grandchildren as beneficiaries, and appointing C.A. White, his two sons, Raymond White (White) and J. Nevin White, his son-in-law, Roy A. Wingate, and Juniata Valley Bank (Bank) as Trustees. The purpose of the trust is to provide income to the minor beneficiaries until such time as each beneficiary reaches twenty-five years of age. At twenty-five, each beneficiary is entitled to receive one-half of his share of the trust corpus. The remaining one-half is to be distributed upon reaching the age of thirty.

The trust assets consist mostly of timber and coal properties situate in central Pennsylvania and valued by the Bank as of May 28, 1980 at $3,245,773.83. The agreement grants broad discretionary powers to the Trustees, including the power to: hold and continue to hold investment property; invest and reinvest without restriction in any securities or property deemed to be for the best interest of the trust or the beneficiaries; rent or lease property for such time and upon such terms as the Trustees in their discretion deem appropriate; sell and convey any trust property which they determine is in the best interest of the trust and its beneficiaries; and, finally, act as they shall see fit under the circumstances based upon their judgment as to the best course to pursue on behalf of the trust and its beneficiaries. In exercising their powers, the Trustees are not required to obtain the consent of any other person or any court.

C.A. White resigned as a Trustee on December 15, 1965. On June 25, 1980, the Bank and Wingate filed a Petition to Resign as Trustees. In their Petition, they indicated that a dispute arose between Raymond White and themselves regarding investment and management of certain timber and coal resources of the trust. As a result of the actions of the Bank and Wingate, one of the trust beneficiaries filed a Petition to Remove Raymond White as a Trustee. Hear[222]*222ings on both Petitions were held on August 18 and 20, 1980. As the result of these hearings, the lower court entered an order granting the Bank’s Petition to Resign and denying the beneficiaries’ Petition to Remove Raymond White. Five of the trust beneficiaries, Kenneth K. King, Sarah King, Thomas F.B. King, John King and Mary King, appealed to the Superior Court, which reversed, concluding that White’s past speculative investment proposals were indicative of his future behavior, and thus his continuation as a Trustee would be detrimental to the trust. Furthermore, the Superior Court held that “a corporate fiduciary must show greater cause for resignation that (sic) an individual.” 321 Pa.Super. 102, 467 A.2d 1148. Accordingly, the Superior Court held that the lower court abused its discretion in refusing to remove White and in permitting the Bank to resign. We reverse.

Our review of the trial court’s action in removing a trustee and permitting another trustee to resign is limited to determining whether that court abused its discretion or committed an error of law in so acting. In Re Estate of Croessant, 482 Pa. 188, 393 A.2d 443 (1978); In Re Crawford’s Estate, 340 Pa. 187, 16 A.2d 521 (1940). If a trial court’s adjudication is supported by the record, we cannot disturb its determination because we would have arrived at a different result.

This appeal raises two issues, the propriety of removing one trustee and the propriety of permitting another trustee to resign. The removal of a trustee is controlled by statute. The Fiduciary Code sets forth the grounds for removing a trustee2. The applicable section of the Code sets forth that a trustee may be removed:

[223]*223(1) [for] wasting or mismanaging the estate, or is likely to become insolvent,
Jjt * * >jc * *
(5) when, for any other reason, the interests of the estate are likely to be jeopardized by his continuation in office.

20 Pa.C.S. § 31823.

The beneficiaries contend that White’s action had the potential of mismanaging the trust, thereby jeopardizing it. Specifically, the beneficiaries claim that White’s proposals of investing in canned foods, wheat, corn, oats, livestock, Swiss francs and German marks were so speculative as to cause harm to the trust. The Superior Court agreed with this allegation and used these proposals as a basis for removing White. However, in addition to the fact that these proposals were not and could not be implemented by White alone, White testified that he did not consider these investments as poor or risky.

In Croessant Estate, supra, we refused to remove a trustee who had neglected the administration of a trust but promised to actively participate in the future. There we held that the removal of a trustee is a drastic remedy, and the need for such action must be clear. We also indicated that such action must be viewed in conjunction with the settlor’s expressed confidence in the trustee, evinced by the trustee’s appointment. In a case where a settlor appoints a particular trustee, removal should only occur when required to protect the trust property. Holmes Trust, 392 Pa. 17, 139 A.2d 548 (1958). (See also, In Re Crawford’s Estate, supra, in which we refused to remove a trustee appointed by the settlor but accused of being hostile to the corporate trustee and of being prone to speculative investments.)

The present record is devoid of any actual wrongdoings by White. Although the Bank was of the opinion that White’s proposals were speculative, White, as a successful businessman, disagreed. In any event, no such [224]*224proposal could be implemented without the approval of the majority of the Trustees. Apparently, the settlors had sufficient confidence in White to appoint him as a Trustee. Until such time as White violates some fiduciary duty, he cannot be removed. Furthermore, the fact that some of the trust beneficiaries are unhappy with White as a Trustee is of no importance. Obviously, the settlor intended that an independent party have control of the trust corpus, not the beneficiaries. Without a demonstration that the trust corpus is in danger of dissipation, mere displeasure of a beneficiary is an insufficient reason for removing a testamentary trustee.

The second issue presented for review is the Superior Court’s reversal of the lower court’s approval of the Bank’s resignation as a Trustee. Both the trial court and the Superior Court relied upon § 106 of the Restatement (Second) of Trusts which provides:

A trustee who has accepted the trust cannot resign except
(a) with the permission of a proper court; or

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In Re White
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Bluebook (online)
484 A.2d 763, 506 Pa. 218, 1984 Pa. LEXIS 346, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-white-pa-1984.