McKees Appeal

Supreme Court of Pennsylvania1881-01-03

96 Pa. 277

Summary · law.co

Holding. The court affirmed the lower court's decree, holding that the provisions of McKee's will permitting accumulation of rents and profits violated the 1853 statute because the accumulation period was indefinite and tied to the widow's lifetime, no specific beneficiaries were designated to receive the accumulated funds, and the arrangement fell outside the statutory framework.

Frederick McKee's will left his mansion and estate to his widow for life, with an annuity of $2,000 annually. Upon her death, the property was to pass to his children in equal shares. After McKee's death, the estate generated substantial rental income and other profits that accumulated significantly beyond the original corpus. The central issue was whether these accumulations should be distributed to the children along with the principal estate upon the widow's death, or whether they should be treated differently under state law.

The court determined that an 1853 statute prohibited the accumulation of rents and profits beyond a twenty-one-year period unless specific statutory conditions were met. McKee's will did not comply with those requirements because it contemplated accumulation for an indefinite period (the lifetime of the widow), without designating any specific beneficiaries for the accumulated funds and without limiting the accumulation period. The court concluded that the statutory scheme aims to prevent indefinite accumulation of wealth and that McKee's provision—which would allow accumulations to swell the estate until the widow's death—directly contradicted the law's purpose and therefore could not be enforced.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether accumulated rents and profits from an estate constitute part of the corpus passing to remainder beneficiaries
Compliance of a testamentary accumulation provision with statutory restrictions on accumulation periods
Interpretation of statutory requirements for lawful accumulation of estate income

Procedural posture

The case concerns an appeal of a decree regarding the disposition of accumulated estate income arising after the testator's death.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

majority opinion

Mr. Justice Gordon

delivered the opinion of the court, January 3d 1881.

Frederick McKee died on the 21st of March 1865, leaving to survive him a widow and two children, one of whom is the petitioner. By his will he devised his mansion house to his wife for life, and also bequeathed to her, for a like period, an annuity of $2000. He then made the following direction: “ And upon her decease I will and bequeath said, house, as also all the rest of my worldly estate, to my children in equal shares, and in default of children or lineal heirs of my body, at the time of her decease, I will and bequeath all my worldly estate to my brothers and sisters in equal shares.” In this we have a precedent, estate so limited as to determine on an event which must certainly happen, that is, the death of the Widow, and the remainder so limited to ascertained persons in esse, Frederick and Melissa McKee, that the preceding estate may determinebefore the estate limited in remainder. It follows that this is a vested remainder — an estate vested in prcesenti, but enjoyable in futuro ; that is, upon the mother’s death.

The corpus of the estate is thus easily disposed of, for of that the testator determined that it should not go to his children until the death of his widow. But since his death there have been large accumulations arising from rents, issues and profits; accumulations which exceed the original estate, and the necessities of the trust, and the serious question is, what disposition shall be made of them ?

Were we allowed to dispose of the matter, as we may suppose the testator would have disposed of it, had he known the facts as they now exist, we would say, without hesitation, these accumulations shall go to his children, for so he would have directed. But as it is obvious that he did not anticipate an increase so large to his estate after his decease, so it is just as obvious that he entertained no intention concerning it. Hence, of such intention we can predicate nothing. On the other hand, were it not for the eighth section of the Act of 18th April 1853, the question would not be difficult of solution ; for, before that act, accumulations as necessarily and naturally formed part of the original estate as vegetable accretions form part of the growing plant. In such case, as the children must wait for the possession of the corpus of the estate until the time fixed for the expiration of the precedent trust, so must they wait for the accretions which by natural growth form part of the corpus. But the Act of 1853 has altered this, and made such accumulations unlawful and void, unless, with relation to them, its terms and conditions are strictly followed.

If, in the present case, we compare the provisions of the will with the terms of the act, we will find that not only were the latter not complied with, but the testator, as we have already said, not having any such accumulations in view, never intended to comply with them. The extreme period allowed for accumultions by the act is t-wenty-one years, with the additional allowance of the ordinary time for gestation. Here the time is indefinite, it may be much more than twenty-one years, for it depends upon the life of Mrs. McKee. Again, in Washington’s Estate, 25 P. F. Smith 102, it was held that the statute permits accumulations in favor of one class of persons only, who are to be possessed of two qualifications; they must he minors; they must also be such persons who will be entitled to take the rents and profits from which the accumulations arise, when the gift or grant goes into effect, though at that time they have passed their minority. Under the operation of the will before us there is no direction in favor of any person or persons. On the other hand, if accumulation is allowed at all, it must be allowed to swell the general estate until the death of Mrs. McKee, when, as part of the corpus, it must go to whomsoever at that time may be entitled. No ingenuity can reconcile a provision of this kind with the statute and it must therefore fall. Had we to deal merely with time, the act itself would settle any difficulty arising from that matter, for it avoids only the excess, but where the effect of the provision is solely to swell the bulk of the estate, it is so diametrically opposed to the intent and spirit of the statute that it cannot be sustained.

Decree affirmed