The trust agreement which this Court is required to construe reads:
"COMMONWEALTH TRUST COMPANY OF PITTSBURGH "June 9th, 1928
"Charles A. Dickson, Commonwealth Bldg., Pittsburgh, Penna.
"Dear Mr. Dickson:
"This will acknowledge receipt from you of $75,000.00 *Page 618 which you have left with us for the purpose of creating a voluntary trust.
"Of this amount, we are prepared immediately to invest $35,000 in 6% mortgages, which will net you 5.3%. The remaining $40,000 we will invest in 5.4% mortgages, which will net you 4.7%. As soon as 6% mortgages are available, we will swing this $40,000, either in whole or in part, in First Mortgage Participations.
"This money is accepted with the understanding that withdrawals may be made by you in the sum of $10,000, or less, at any time on 30 days notice and for larger amounts than $10,000 60 days notice. This agreement, subject to withdrawal provisions above named, may be terminated by you or ourselves at any time on 10 days notice.
"We are delivering to you Trust Book No. 1131 showing your deposit of $75,000. Remittances will go forward to you semi-annually, the first going forward August 4th, 1928, and every six months thereafter. These remittances, under present understanding, are to be deposited to the credit of Charles A. Dickson Special Account in the Banking Department and duplicate deposit slips mailed to you.
"Very truly yours, (Signed) Earl A. Morton, Trust Officer."
The obligation under this agreement, as I view it, was for the Trust Company defendant to invest settlor's (decedent's) $75,000. $35,000 was directed to be placed in 6% first mortgages and $40,000 in 5.4/10% mortgages. It was specified that when 6% mortgages were available the $40,000 was to be reinvested in first mortgage participations. Settlor reserved the privilege of withdrawing from the trust: amounts of $10,000 or less on 30 days notice and larger amounts on 60 days notice.
By January 19, 1929 all the fund was invested as agreed. Settlor added $5,000 in cash to the trust and *Page 619 withdrew $2,500. The trust fund on April 16, 1934 was $77,500.
On April 16, 1934 the Orphans' Court of Allegheny County assumed custody and control of the mortgage pool for the purpose of liquidation.
Settlor thereafter — from 1934 until his death on November 11, 1938 — applied for and received in liquidating dividends $23,250. His widow, as executrix, after his death, similarly received $27,900 in liquidation. $51,150 was thus paid in liquidation leaving $26,350 frozen in the pool. It is this sum for which the widow, as executrix, has sued the inter vivos trustee. The majority now decide that this sum is due her.
With the court below, I am at a loss to discover in the writing the slightest intent on the part of the trustee that the trustee guaranteed or insured repayment of the trust fundin cash to the settlor. The contract was solely one ofinvestment in a specified manner. While under the trust terms settlor could withdraw funds from the trust, it requires a lively imagination to presume from such provision an undertaking of guarantee by the trustee. All the cash was directed to be invested in specified mortgages. What the parties obviously intended by the withdrawal provision was that, upon notice, mortgages would be sold or liquidated in order to secure the cash to be withdrawn from the trust. This was settlor's cash, not the trustee's.
I need not analyze the various cases cited in the majority opinion. The facts in each of them differ from those here presented. For example, in Cunningham's Estate, 328 Pa. 107,195 A. 130, the terms of the trust agreement provided, inter alia, that the trustee guarantees "Payment of the principal sum within three (3) months after the same has been demanded by the [settlor] . . ." while in Fortna v. Commonwealth Trust Company,341 Pa. 138, 19 A.2d 57, the trust instrument provided that any increase in the amount of the principal sums earned by the trustee should be retained by the *Page 620 trustee upon termination of the trust in consideration of the trustee's liability for any loss sustained in the investment and the trustee guaranteed "the repayment of the said principal sum of Thirteen Thousand Eight Hundred Dollars ($13,800.00), upon the termination of the contract. . . ." Liability isproperly imposed where the intent of the parties is demonstrated that the trustee agreed to become a guarantor,insurer or debtor. These facts are not presented in this case. Settlor's right to diminish the trust, on notice, is not a sufficient indication of the trustee's intent to guarantee the fund.
Furthermore settlor himself never construed this contract as the majority now do; neither did his widow for seven years after settlor's death. At no time did either he or she during this period of eleven years ever demand cash from the intervivos trustees. On the contrary, both claimed and accepted liquidating dividends from the mortgage pool. The construction adopted by the majority, in my opinion, is unwarranted and contrary to the construction of the parties themselves.
I would affirm the judgment of the learned court below on the opinion of Judge SMART.