Scholler Estate

20 Pa. D. & C.2d 318, 1959 Pa. Dist. & Cnty. Dec. LEXIS 334
CourtPennsylvania Orphans' Court, Philadelphia County
DecidedDecember 7, 1959
Docketno. 210 of 1959
StatusPublished

This text of 20 Pa. D. & C.2d 318 (Scholler Estate) is published on Counsel Stack Legal Research, covering Pennsylvania Orphans' Court, Philadelphia County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Scholler Estate, 20 Pa. D. & C.2d 318, 1959 Pa. Dist. & Cnty. Dec. LEXIS 334 (Pa. Super. Ct. 1959).

Opinion

The facts appear from the following adjudication of

Lefever, J.,

— Under date of June 22, 1939, Frederick C. Scholler, settlor, executed an irrevocable deed of trust wherein he created the “Scholler Foundation”. Settlor appointed himself, his sister, Ida M. Scholler, and Frederick C. Fuges, as trustees. The three trustees have died, and successors have been appointed in accordance with the procedure and requirements prescribed in the deed. There is presently before the court the first account of the successor trustees, Lloyd O. Koons, Frank E. Holland, E. E. Rettberg, Jr., Frederick L. Fuges and A. Winston Edwards.

The trust instrument opens with a “Declaration of Purpose”, viz.:

“I, Frederick C. Scholler, of the City and County of Philadelphia, Commonwealth of Pennsylvania, out of the wealth accumulated by me and that derived by me [320]*320from my sister, Ida M. Scholler, and from my brothers, Adolph, Henry H. and William H. Scholler, desiring, in conformance with their known wishes, to create a fund, the income of which shall be used for the benefit of mankind; to set up a charitable entity to which I may ultimately transfer all my shares of stock in Scholler Brothers, Inc., Scholler Brothers, Ltd., and Trisco Products, Inc.; to combine my shareholdings in said corporations with whatever other property I now or hereafter may convey to the charitable entity so that the income derived from the shares of Scholler Brothers, Inc., Scholler Brothers, Ltd., and Trisco Products, Inc., together with the income derived from the other property now or hereafter transferred to the charitable entity, will be used for the benefit of mankind; and finally, desiring to perpetuate the memory of my deceased brothers and to carry out their wishes and the wish of my sister, Ida M. Scholler, that the wealth accumulated by them be used perpetually for the betterment of mankind; to hereby create and establish a charitable trust to be known as The Scholler Foundation, hereinafter referred to as the Foundation.” (Italics supplied).

Settlor then transferred and conveyed the corpus of the trust to the trustees, in trust:

“To take, receive, hold, invest and reinvest the same, and to collect the rents, issues and profits therefrom; and to pay and distribute the same for such of the following charitable purposes as the Trustees, or a majority of them, shall determine:

“In general, without in any way restricting the charitable purposes for which same may be distributed, for the alleviation of poverty and destitution, for the promotion of scientific research, including research in the various branches of chemistry, for assistance to persons under a physical disability, for enabling needy students to obtain college educations, for the benefit of [321]*321colleges, universities, churches, hospitals, [and similar charities], and for such other charitable, (literary), [educational and public] purposes as in the discretion of the Trustees may seem desirable, the distribution, however, not to be limited geographically to the United States of America; (and specifically for the purpose of providing hospitalization, medical care, and educational, literary, and recreational facilities for employees and/or former employees of Scholler Brothers, Inc., and/or Scholler Brothers, Ltd., and/or Scholler Brothers, Ltd., and/or Trisco Products, Inc., and their families, and/or employees of any other corporation, a majority interest in the voting stock of which is subsequently acquired by The Scholler Foundation, or by Scholler Brothers, Inc., or Scholler Brothers, Ltd., or Trisco Products, Inc.).” 1 (Italics supplied.)

The trust deed set forth in careful detail the powers and duties of the trustees, particularly with regard to the management and operation of settlor’s three corporations, the issuance of dividends, the payment of bonuses and other pertinent matters. Settlor clearly indicated that the management and operation of the businesses should be clearly separated from the administration of the trust.

Upon request from the trustees, the United States Treasury Department, under date of February 19, 1947, ruled: “. . . that The Scholler Foundation is entitled to exemption from Federal income tax ... as it is shown that the foundation was created and is operated exclusively for charitable purposes.”

Request for similar ruling was made to the Department of National Revenue — Taxation Division, of Canada. Under date of June 21, 1951, the Canadian [322]*322Department ruled that: “As the benefits provided for by their second objective are to be allocated to a limited group of persons the Scholler Foundation loses its identity as a charitable organization . . and, therefore, is not entitled to tax exempt status.

To meet this Canadian ruling, settlor, on August 17, 1951, and on March 17, 1952, executed two documents under seal, each designated, “Instrument of Amendment of the Scholler Foundation Deed of Trust.” Therein he rewrote the article entitled, “Transfer of Property,” deleting all reference to the employes of his several companies, and also several questioned words and phrases.2 The trustees joined in the amendments. The charitable objects under the final so-called amendment were as follows:

“In general, without in any way restricting the charitable purposes for which same may be distributed, for the alleviation of poverty and destitution, for the promotion of scientific research, including research in the various branches of chemistry, for assistance to persons under a physical disability, for enabling needy students to obtain college educations, for the benefit of colleges, universities, churches, hospitals, and for such other charitable purposes as in the discretion of the Trustees may seem desirable, the distribution, however, not to be limited geographically to the United States of America.”

Following the above, settlor provided:

“All the terms, conditions and provisions of the Deed of Trust of THE SCHOLLER FOUNDATION shall remain in full force and effect, except insofar as they are inconsistent with the amendments herein authorized.”

Settlor initially funded the trust with a gift of $1,000 in cash. Thereafter, settlor, individually and [323]*323through the aforesaid companies, and from time to time, gave to the trustees and the successor trustees various gifts of cash and stock of the Seholler companies in the amount of $628,553.03, prior to the execution of the amendment of August 17, 1951, in the amount of $7,500, prior to the execution of the amendment of March 17, 1952, and in the amount of $1,241,-335.45 thereafter. The trustees and successor trustees accepted these gifts and added them to the trust corpus.

On October 5, 1957, settlor died a domiciliary of Atlantic City, N. J. His last will and testament, dated July 16, 1954, was probated in Atlantic County, N. J., and on October 21, 1957, letters testamentary were issued by the Surrogate’s Court of Atlantic County, N. J., to Lloyd O. Koons and The First Pennsylvania Banking and Trust Company, the executors named by testator in his will.

By item 3 of his last will and testament, testator. provided as follows:

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Curry Appeal
134 A.2d 497 (Supreme Court of Pennsylvania, 1957)
Britt Estate
87 A.2d 243 (Supreme Court of Pennsylvania, 1952)
Wiegand v. the Barnes Foundation
97 A.2d 81 (Supreme Court of Pennsylvania, 1953)
Wright's Estate
131 A. 188 (Supreme Court of Pennsylvania, 1925)
Funk Estate
45 A.2d 67 (Supreme Court of Pennsylvania, 1945)
Wolters Estate
59 A.2d 147 (Supreme Court of Pennsylvania, 1948)
Keefer Estate
45 A.2d 31 (Supreme Court of Pennsylvania, 1945)
Irish v. Irish
65 A.2d 345 (Supreme Court of Pennsylvania, 1949)
Lehigh University v. Hower
46 A.2d 516 (Superior Court of Pennsylvania, 1945)
Spangler's Appeal
24 Pa. 424 (Supreme Court of Pennsylvania, 1855)
Cressman's Appeal
42 Pa. 147 (Supreme Court of Pennsylvania, 1862)
Woods's Appeal
75 Pa. 59 (Supreme Court of Pennsylvania, 1874)
Russell's Appeal
75 Pa. 269 (Supreme Court of Pennsylvania, 1874)
Mann v. Mullin
84 Pa. 297 (Supreme Court of Pennsylvania, 1877)
Manners v. Philadelphia Library Co.
93 Pa. 165 (Supreme Court of Pennsylvania, 1880)
Bristor v. Tasker
19 A. 851 (Supreme Court of Pennsylvania, 1890)
Kinike's Estate
25 A. 1016 (Supreme Court of Pennsylvania, 1893)
Lefebvre v. D'Arcy
84 A. 765 (Supreme Court of Pennsylvania, 1912)
Toner's Estate
103 A. 541 (Supreme Court of Pennsylvania, 1918)
Kunkel v. Kunkel
110 A. 73 (Supreme Court of Pennsylvania, 1920)

Cite This Page — Counsel Stack

Bluebook (online)
20 Pa. D. & C.2d 318, 1959 Pa. Dist. & Cnty. Dec. LEXIS 334, Counsel Stack Legal Research, https://law.counselstack.com/opinion/scholler-estate-paorphctphilad-1959.