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Home My WebLink About02-16-89 (3) COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA ORPHANS' COURT DIVISION No. 21-86-398 ESTATE OF ROBERT M. MUMMA, Deceased PETITIONERS' MEMORANDUM OF LAW IN SUPPORT OF PETITION FOR DECLARATORY JUDGMENT UNDER 42 Pa.C.S. 9 7533 AND FOR OTHER RELIEF UNDER 20 Pa.C.S. Subch. 33C and ~ 7133 Petitioners Barbara McK. Mumma and Lisa M. Morgan, Executors of and Trustees under the will of Robert M. Mumma, deceased (the "Estate"), submit this Memorandum of Law in support of the Petition for Declaratory Judgment under 42 Pa.C.S. 9 7533 and for Other Relief under 20 Pa.C.S. Subch. 33C and 9 7133. I. INTRODUCTION Robert M. Mumma (the "decedent") died on April 12, 1986, a resident of Cumberland County, Pennsylvania. Letters Testamentary on decedent's estate were granted to Petitioners by the Register of Wills of Cumberland County on June 5, 1986. Decedent's will directs that the bulk of his estate, after specific bequests of tangible personal property, be held in two trusts for the benefit of his wife, Barbara McK. Mumma, during her lifetime, a Marital Trust under Article SEVENTH and a Residuary Trust under Article EIGHTH. Paragraph (3) of section NINTH of decedent's will empowers his Trustees: To sell or exchange, either privately or at pUblic sale without prior approval of any 3~i~ court, at such times and at such price or prices and on such terms and conditions as the trustees may consider advisable, all or any part of the trust property, real, personal or mixed.... Article THIRTEENTH of decedent's will further provides: Notwithstanding the powers herein otherwise given, I direct that my stock in privately held corporations, supervised and administered by me as Executive or operating officer prior to my decease or my stock in privately held corporations which otherwise is owned by me at my decease be not sold unless all of my trustees, and particularly my individual trustee or trustees, shall agree in writing that such stock shall be sold. It is my desire that if expedient and possible, the businesses which I have personally directed during my lifetime and of which I have had an interest be continued for the benefit of and under the management and control of my immediate family. Petitioners, as decedent's Executors and Trustees, are the largest shareholders in Nine Ninety Nine, Inc. ("999") and Hummelstown Quarries, Inc. ("Hummelstown"), privately held corporations the operations of which decedent personally directed during his lifetime. An offer has been made by an overseas company to purchase 999, Hummelstown and certain other related assets (collectively "Pennsy Supply"). This offer leads to two questions: first, whether the Will read as a whole, and specifically the language of Article THIRTEENTH, evidence an intent that Petitioners may not sell the Estate's holdings in pennsy Supply to a non-family buyer, and second, whether any extrinsic evidence should be considered in -2- :"/ I t..'c,,:> construing the manifestly precatory language of the second sentence of Article THIRTEENTH. II. ARGUMENT A. THE OVERALL SENSE OF DECEDENT'S WILL, AND IN PARTICULAR THE LANGUAGE OF ARTICLE THIRTEENTH, MAKE CLEAR DECEDENT'S INTENT TO EMPOWER HIS TRUSTEES TO SELL THE ESTATE'S HOLDINGS IN PENNSY SUPPLY. Two axioms guide courts in construing wills. The first axiom is that a will is to be construed in accordance with the intent of the testator. See,~, Estate of Tavlor, 480 Pa. 488, 391 A.2d 991 (1977). The second and related axiom is that the testator's intent must be discerned from the language employed in the will. Britt's Estate, 369 Pa. 450, 87 A.2d 243 (1952). Thus, what the testator said, not what he might have said or what a third party thinks he meant to say, is the crux of will construction. 369 Pa. at 454-455, 87 A.2d at 245. These axioms dictate that to construe decedent's will in the instant case, the decedent's language, both in Article THIRTEENTH and throughout the Will, must be examined. Such an examination clearly manifests decedent's intent to permit Petitioners to sell the Estate's holdings in pennsy Supply. Words such as "wish," "desire" and "want" when used by a testator are presumed to be precatory rather than obligatory. Calder's Estate, 343 Pa. 30, 21 A.2d 907 (1941); Bearinqer's Estate, 336 Pa. 253, 9 A.2d 342 (1939). However, when the will indicates that the testator intended such words 36~ -3- to impose an obligation they will be construed as mandatory. Calder, 343 Pa. at 37, 21 A.2d at 911; Bearinqer, 336 Pa. at 256, 9 A.2d at 343. Therefore, whether a testator, and, with reference to the present case, the decedent, has imposed obligatory restrictions upon the powers of his Trustees through precatory language is a question of intent as disclosed by the will. Clvde Estate, 30 Pa. D. & C. 2d 219 (D.C. Phila. 1963). In Clvde, the testator by his 1905 will empowered his trustees to make investments without being confined to so- called "legal investments." Id. at 221. The testator then stated that he "did not wish" his trustees to invest in common stock "except as they shall deem it necessary to protect . personal property." Id. at 221. The court held that the testator's authorization to invest in nonlegal investments (which in 1905 notably included common stock) was not limited by his "wish" regarding common stock. Id. at 223. Rather, the testator merely intended to give his trustees discretion ("as they shall deem it necessary") to determine to what extent investments should be made in common stock. Id. Further, in Lindsav's Estate, 311 Pa. 536, 166 A. 848 (1933) the Supreme Court of Pennsylvania considered whether language markedly similar to that of Article THIRTEENTH limited a trustee's power to sell certain bank stock. The will provided: It is my wish that my said trustee shall not sell my stock in the Carbondale Miners and -: / ., '. ...:;J './ -4- Mechanics Savings Bank, but hold the same during the continuance of this trust, so that the same may go to my daughter, or her children; and I further direct that my said trustee shall not sell my real estate during the said trust, unless there is good and substantial reason therefor. 311 Pa. at 538, 166 A. at 848. When the trustee sold the stock at a profit (albeit not as great a profit as could have been realized upon a later sale), the testator's daughter sought to have the trustee surcharged for acting beyond the scope of its powers. Id. Two factors led the court to conclude that the above quoted language did not constrain the trustee: the presumption that language couched as a "wish" is precatory, and the fact that the testator had used mandatory language elsewhere in the will. 311 Pa. at 539, 166 A. at 548-549. In light of the foregoing authority, in the instant case, the decedent's statement that "it is my desire that if expedient and possible" his business holdings should be retained within his family is not a restriction on the Trustees' power to sell. Rather, this statement immediately follows his direct authorization to sell such business holdings if his Trustees unanimously agree to do so in writing, and could not more clearly express and confirm that the Trustees are to have the power to dispose of such holdings, notwith- standing the decedent's "wish." Moreover, there is not the slightest suggestion anywhere in the Will that the word "desire" should be given other than its ordinary precatory meaning. -5- -"'1/ / J \_)'" 7 The general axioms of will construction enunciated above further confirm this construction. The decedent's intent must be determined by what he said and nothing else. And, in the present case, what the decedent said is a clear and unequivocal direction -- that his business holdings may be sold if his Trustees so agree. The decedent clearly knew how to use mandatory language, which appears throughout the Will, including his mandatory direction in the first sentence of Article THIRTEENTH. This sentence illuminates the precatory sentence which follows. Although the decedent directed that family business stock be sold only upon the agreement of his individual Trustees, he merely expressed his desire that if his Trustees considered it expedient they should retain the family company stock within the Mumma family. Any contention of the Respondent that decedent intended to impose an obligation upon his Trustees to retain the family company stock within the family is therefore flatly contradicted by the Will itself and is entirely without support. B. BECAUSE THE DECEDENT'S INTENT THAT HIS TRUSTEES HAVE DISCRETION TO SELL HIS BUSINESS INTERESTS IS UNAMBIGUOUS AND CLEAR, THIS COURT SHOULD NOT CONSIDER EXTRINSIC EVIDENCE AS TO HIS INTENT. In a case turning on the ascertainment of a testator's intent, the Pennsylvania Supreme Court has instructed that "where a court feels that it can with reasonable certainty ascertain the intent of the testator .3/...$- -6- through examination of the will itself, the court generally does not look to matters external to that document." Estate of Tavlor, 480 Pa. 488, 494, 391 A.2d 991, 994 (1977). The Tavlor court noted that only when a testator's intent cannot be ascertained by reference to the will, or where a latent ambiguity is discovered,1/ may a court inquire into the circumstances of the testator at the time of execution of the Will, as well as other extrinsic evidence that may bear on intent. rd. See also Kellv Estate, 473 Pa. 48, 373 A.2d 744 (1977); Jacobson Estate, 460 Pa. 118, 331 A.2d 447 (1975); Soles Estate, 451 Pa. 568, 304 A.2d 97 (1973). Thus, a court should not look beyond the will itself for evidence of a testator's intent where, as here, that intent is unambiguous and clear. Further, even if a court cannot "with reasonable certainty" ascertain the testator's intent from the face of the Will, so that resort to extrinsic evidence is proper, inquiry must be limited in scope. Extrinsic evidence may not be used to redraft the Will (Reinheimer's Estate, 265 Pa. 185, 189, 108 A. 412, 413 (1919)); nor may it add to, vary or contradict the terms of the Will (Estate of Rudv, 329 Pa. Super. 458, 463, 478 A.2d 879, 881 (1984)). Rather, the rules 1/ "A latent ambiguity is one that is not apparent upon the face of the instrument alone and that is discovered when it is sought to identify the property, the beneficiaries, etc." 4 Page on wills 9 32.7 (W. Bowe & D. Parker, eds. 1961). No such ambiguity is present in this case. ~/' I,..""'" -7- governing admission of extrinsic evidence are subject to the over-arching axiom of Will construction discussed above -- that the testator's intent, as he expressed it in his Will, must control. Thus, extrinsic evidence may only be used to explain the meaning of the words the testator used. Estate of Duld, 389 Pa. 108 (reported at 8 Pa. D. & C. 2d 330, 333), 132 A.2d 247, 250 (1957). Applying this authority to the present case, this Court clearly does not need to resort to extrinsic evidence. As discussed above, decedent's authorization in Article THIRTEENTH to sell family business holdings is clear. One cannot imagine how extrinsic evidence could give a meaning to decedent's words -- "I direct that my stock . not be sold unless all of my Trustees shall agree It is my desire that if expedient and possible, the businesses . . . be continued under the . . . control of my family" -- other than the meaning ascribed above. There is simply no ambiguity, latent or patent, in decedent's words. Therefore, this Court should not consider extrinsic evidence in construing the language of Article THIRTEENTH of decedent's will. III. CONCLUSION For the foregoing reasons, it is requested that this Court enter an Order in the form attached hereto confirming the power of Petitioners under Article THIRTEENTH of decedent's -8- ,''',:.:> " will to sell the Estate's holdings in pennsy Supply to a non- family buyer. Ro.pectfU'/,; ;;~mittedl W LLI E. ZEITER, I.d. #04629 PSEPH A. O'CONNOR, JR., 1.0. #18327 organ, Lewis & Bockius 2000 One Logan Square Philadelphia, PA 19103 WILLIAM F. MARTSON, 1.0. #06291 Martson, Deardorff, Williams & otto 10 East High Street Carlisle, PA 17013 (717) 243-3341 Attorneys for the petitioners -9- 3~g COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA ORPHANS' COURT DIVISION NO. 21-86-398 ESTATE OF ROBERT M. MUMMA, Deceased ORDER AND NOW, this day of , 1989, it is hereby ordered that Petitioners Barbara McK. Mumma and Lisa M. Morgan, Executors of and Trustees under the Will of Robert M. Mumma, deceased, may, under Article THIRTEENTH of decedent's Will, and upon their agreement in writing, sell the Estate's holdings in any privately held corporation, including specifically but without limitation, Nine Ninety Nine, Inc., Hummelstown Quarries, Inc. and other related assets (collectively "pennsy Supply") to such purchaser, including a non-family member, as the trustees, in the exercise of their discretion, may select in the best interests of the Estate. By the Court: J. . ~t) q .,..,,'.... ,. ~'O"':J::t..<::;: ",::roo 0 1-" I-l 1-'" 0 11 en I--' VI I-' O~ (1) f-;' ~\ll \ll'd 1-'- P.O::J::r\ll '" ro ::J - 13. '" I-' ro :>' W'O 1:"" t'00 ::Jro I .0 1:P 0 I; VI J::01i N........p.J 0... """"'1;:>;" tv I-l ro 1-'" C-l =#= o J::lio W lJl .... 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