*197Dissenting Opinion by
Mb. Chief Justice Bell:The Majority Opinion in Hallowell Trust has three vices: (1) it may enrich or pauperize a life tenant every year at the whim of the Legislature, which is ridiculous; (2) in practical effect, it wipes out the applicability of the Statute against Accumulations to trusts and wills and written instruments at the date they were created or became effective; and (3) by necessary implications (or expressly), it overrules this Court’s decisions in Pew Trust, 411 Pa. 96, 191 A. 2d 399; Cannistra Estate, 384 Pa. 605, 121 A. 2d 157; Castner Estate, 412 Pa. 232, 194 A. 2d 330 (October 1963, which we note approved Maris’s Estate, 301 Pa. 20, 151 A. 577); and McIlhenny Trust, 15 Fid. Rep. 367 (Orphans’ Court of Philadelphia County).
In his 1935 inter vivos trust, the settlor Howard T. Hallowell, after giving the trust income to his wife for her life, clearly expressed his intention that stock dividends paid on the Standard Pressed Steel Company stock, which constituted the corpus of the trust, be and remain part of the corpus for the Ufe of his wife. In view of this provision of the trust, it is easily understandable why the Majority desire to reach the result they do. Nearly everybody dislikes the Statute against Accumulations and also the Rule against Perpetuities, each of which nullifies and destroys the intent of a testator or settlor. However, the Statute against Accumulations was the law of Pennsylvania at the time of the creation of the trust and had been the law of Pennsylvania since 1853, and, with a very important change, still is the law. The Majority Opinion is merely another example of the maxim that “hard cases [i.e., claims which are unappealing or inequitable] make bad law.”
The Majority reach their result by concluding that the Principal and Income Act of 1947 requires treating *198six per cent (annual) stock dividends as principal and summarily dismissing the Statute against Accumulations—the Act of April 18, 1853, P. L. 503, 20 P.S. §301.2—as being “without present application.” Cf. Catherwood Trust, 405 Pa. 61, 173 A. 2d 86.
When this trust was created in 1935, it was well settled law that a direction to keep these small stock dividends intact and as additions to principal was invalid and void. See Maris’s Estate, 301 Pa., supra. Mavis’s Estate held that a similar direction to allocate stock dividends to principal was void under the Statute against Accumulations because such stock dividends in fact and in law constituted income. Since Maris was bottomed and decided on the Statute against Accumulations (1853), we must review it and subsequent statutes and decisions.
The Statute against Accumulations, i.e., Act of April 18, 1853, supra, pertinently provided in Section 9: “. . . no person . . . shall ... by any deed, will, or otherwise, settle or dispose of any real or personal property, so and in such manner that the rents, issues, interest, or profits thereof, shall be wholly or partially accumulated for any longer term than the life or lines ... of any such grantor . . . settler [sic] ... or testator . . ."* The Majority admit that this “statutory phraseology embraces ‘income.’ ”
Section 9 of the Statute against Accumulations was amended by the Act of May 25, 1939,** P. L. 201, to permit a direction by a settlor or a testator to allocate extraordinary** dividends (either cash or stock), *199and profits realized from the sale of certain stock to principal.
In 1947, the Rule against Accumulations was incorporated into tlie Estates Act of April 24, 1947, P. L. 100. In this Estates Act, the Rule against Accumulations again permitted a settlor or testator to direct (or authorize) the allocation of extraordinary* dividends to principal, and to that extent Umitedly repealed Section 9 of the Statute against Accumulations of 1853, supra. This repealer specifically provided in Section 20 that the Estates Act repealed the Statute against Accumulations “so far only as relates to conveyances effective on or after the first day of January, one thousand nine hundred forty-eight.”** We may again note that the Statute against Accumulations, like the Rule against Perpetuities, invalidates or destroys the intention of a settlor or a testator when he seeks to accumulate income for a longer period of time than the Statute or Rule permits.
The Majority Opinion holds that whether a direction to treat dividends as principal or income depends *200upon each Act of the Legislature and the date it was passed and made applicable—i.e., whether before 1939, before 1945, before 1947, before 1956, before 1963, or thereafter. If the Majority Opinion is correct—that a Legislature can change at will, and vary from year to year, a testator’s or settlor’s meaning of “income” or “principal”—this can create (1) not only absurdity but chaos, and (2) also possible poverty for a life tenant who is almost always the primary beneficiary of a settlor and testator. For example, the Legislature of Pennsylvania now meets annually and can, according to the Majority Opinion, change annually what stock dividends belong to a widow who is given the income for life and what must belong to the remainder-men.
Statutes
The Principal and Income Act of May 3, 1945, P. L. 416, was in effect for only about two years when it was repealed in toto by the Principal and Income Act of July 3, 1947, P. L. 1283, 20 P.S. §3470, which reenacted almost verbatim the Act of 1945.
Section 2 of the Principal and Income Act of 191¡"¡ pertinently provided: “This act shall govern the ascertainment of income and principal, . . .: Provided, That the person establishing the principal may himself direct the manner of ascertainment of income and principal . . . and such provision and direction, where not otherwise contrary to law, shall control, notwithstanding this act.” This proviso and condition is utterly ignored by the Majority, even though the Majority Opinion states that “Time and again, this Court has stated that, unless in violation of public policy or the law, the intent of a settlor must prevail.” Furthermore, if the Principal and Income Act of 1947 treated *201all stock dividends of the kind and rank here involved as principal (in the absence of a contrary direction by the settlor) in trusts created thereafter or theretofore, why was it necessary for the Legislature, in the Estates Act of the same year, to approve directions to apply all extraordinary dividends to principal in conveyances made thereafter?
The Principal and Income Act of 1947 was amended by the Act of August 1, 1963, P. L. 442, 20 P.S. §3470.5, to provide that dividends or distributions of stock of the same class shall be deemed income if the number of shares distributed was six per cent or less. However, this amendment by its terms is applicable only to corporate dividends paid subsequently to August 1, 1963.
Decisions
This is obviously and unquestionably a pre-191f5 trust—such trusts have often vexed and more recently perplexed many. Notwithstanding the Majority’s wishful thinking, Maris's Estate, 301 Pa., supra; Pew Trust, 411 Pa., supra; and the cases hereinafter discussed, together with the Statute against Accumulations, govern, without any doubt, the questions or issues raised or involved in this case. In Maris’s Estate, this Court decided that small stock dividends were, and always had been for 100 years, income*' and a provision in a will that “all stock dividends shall be considered as principal” was in practical and legal effect a direction to accumulate income for the life of testator’s wife and was contrary to the express terms of the Act of April 18, 1853, supra, and therefore void.
The Pew Trust was created in 1932 and involved the question of whether annual stock dividends of six *202per cent or less were income in the absence of a clear expression of a contrary intent by the creator of the trust. We note at the outset that neither the Statute against Accumulations nor the long and well established principle that the donor’s intent cannot contravene or overcome the law were involved, discussed or considered in Pew Trust. In that case, the Court pertinently said (pages 102, 107-108, 108-109, 109) : “Never in Pennsylvania’s long history until 1945, had a life tenant’s right to ordinary cash and ordinary stock dividends been denied. [Emphasis in original.] ... As the Court aptly said in Schaad v. Hotel Easton Co., 369 Pa. 486, 87 A. 2d 227 (page 491), c. . . “no principle is more firmly established than that the laws which were in force at the time and place of the making of the contract enter into its obligation with the same effect as if expressly incorporated in its terms”: Beaver County Building and Loan Association v. Winowich, 323 Pa. 483, 489, 187 A. 481, 484. . . .’ We must therefore construe the 19J¡1 proviso in its application to this 1982 trust in the light of her language which in 1932 had a clear meaning to laymen, lawyers and Judges alike. . . . [Emphasis in original.]
“While very few lawyers knew or could unravel and very, very few laymen knew or had ever heard of Pennsylvania’s equitable Rule of Apportionment of extraordinary stock dividends and of proceeds of sale of stock, every lawyer and every layman?’ (testator and settlor alike) and every cestui que trust knew that small stock dividends had for over 100 years always* been considered to belong to the life tenants, who were (almost always) the primary objects of the settlor’s bounty, and not to great grandchildren or unknown or unborn remaindermen. Indeed, if Mrs. Pew had wished and intended all stock dividends (includ*203ing those which represented earnings) to be a part of principal, such a provision and intent would have been illegal, in 1932 as in violation of the then rule against accumulations: See Warden Trust, 382 Pa. 311, 115 A. 2d 159; Cannistra Estate, 384 Pa. 605, 121 A. 2d 157; Act of April 18, 1853, P. L. 503. . .
In the instant case, there was no doubt of the testator’s intent to allocate small stock dividends to principal instead of having them continue to be income. However, a settlor’s or testator’s intent cannot prevail when it is contrary to or violative of the law, and to this extent his intent is limited and must yield to the pertinent law. Pew Trust, 411 Pa., supra; Cannistra Estate, 384 Pa., supra; Castner Estate, 412 Pa. 232, 194 A. 2d 330. In Pew Trust, 411 Pa., supra, the Court said (page 106) : “In Walton Estate, 409 Pa. 225, 186 A. 2d 32, the Court aptly and relevantly said (page 231) : ‘ “ ‘ “No rule regarding wills is more settled than the great General Rule that the testator’s intent, if it is not unlawful, must prevail” ’ ”: Collins Estate, 393 Pa. 519, 522, 143 A. 2d 45. . . .’ ”
In Cannistra Estate, 384 Pa., supra, the beneficiaries of the testamentary trust sought its termination. The Court aptly said (page 607) : “No rule regarding wills is more settled than the great General Rule that the testator’s intent, if it is not unlawful must prevail! . . . The foregoing century-old principle or rule is nevertheless subject to several exceptions: For example, the testator’s intent cannot prevail when it is against public policy (Moorehead’s Estate, 289 Pa. 542, 137 A. 802; Cf., also, Africa Estate, 359 Pa. 367, 59 A. 2d 925); or violates the rule against perpetuities (Newlin Trust, 367 Pa. 527, 80 A. 2d 819), or statutory restrictions such as the statute of accumulations (Warden Estate, 382 Pa. 311, 115 A. 2d 159); or where the testator gives a fee simple or absolute estate *204and then attempts to impose restraints on sale or alienation. (Sowers Estate, 383 Pa., supra; Stineman v. Stineman, 382 Pa. 153, 114 A. 2d 137.) ”
In Costner Estate, 412 Pa. supra, which involved a 1932 testamentary trust, the Court (in an Opinion by Mr. Justice Benjamin R. Jones) reaffirmed Maris’s Estate, 301 Pa., supra, and held that a testamentary direction to accumulate income in a testamentary trust was void under the Act of April 18, 1853. In Costner Estate, Mr. Justice Jones speaking for the majority of the Court, said (page 240) : “However, as we stated in Howell’s Estate, 180 Pa. 515, 519, 37 Atl. 181: 1 . . when the policy of the law is violated by a direction to accumulate no effect should be given to the intention of the testator ....’” In the dissenting Opinion by Mr. Justice Roberts, he relevantly says (in a footnote, page 241) : “Section 9 of the Act of April 18, 1853, P. L. 503, 20 P.S. §3251, is applicable. It is repealed only as to conveyances effective on or after January 1, 1948.”
The Majority Opinion not only overlooks the facts in Pew Trust, 411 Pa., supra, and mistakes the law, but in order to sustain their conclusions, the Majority have to expressly repeal the 1853 Statute against Accumulations which was in effect at the time of the creation of this trust in 1935.
The error of the Majority is made even clearer by the fact that under their interpretation and theory, they would hold that small stock dividends in a pre1945 trust are principal and after 1945 are principal or income, depending upon the annual whim of the Legislature and changeable retroactively by it every year it meets. This is obviously unrealistic and absurd. Both the settlor’s intention and this provision of the Hallowell trust must be ascertained and governed and limited by the law in effect at the time this inter vivos trust was created.
*205To summarize: For over 100 years prior to 1945, (1) all annual dividends—stock as well as cask—of six per cent or less were income, unless the testator or settlor lawfully directed to the contrary; and (2) prior to 1945, neither the Principal and Income Act of 1945 nor any other similar Act or Court decision made annual cash or stock dividends of six per cent or less principal unless the testator or settlor clearly and lawfully so provided—see Pew Trust, 411 Pa., supra, which overruled a contrary footnote in Gather-wood Trust, 405 Pa., supra—; and (3) such a provision by a settlor or testator was valid if, and only if, it did not violate the law.
In this case, President Judge Alfred L. Taxis, Jr., in an able adjudication, correctly held (1) that settlor intended all stock dividends, irrespective of the amount, to be retained in principal; and (2) that the net income from his estate be paid to his wife for her life; and (3) that the Principal and Income Act of 1947 does not apply to stock dividends of six per cent or less; and (4) that the stock dividends of six per cent or less are income unless the settlor or testator (a) clearly directed to the contrary and (b) such direction was valid and not contrary to law; and (5) that a direction in a pre-1945 trust to accumulate stock dividends of six per cent or less by adding them to principal is not valid if and when and to the extent it violates the Act of 1858. It follows that these small stock dividends are payable after settlor’s death as income to the settlor’s wife for her life.
For all of the foregoing reasons, I would affirm the Decree of the Court below.
Mr. Justice Musmanno joins in this dissenting Opinion.Italics throughout, ours, unless otherwise noted.
The Majority Opinion quotes at great length from an opinion of Professor Austin W. Scott, which was part of an amicus brief filed in this case. As Scott states: “The Pennsylvania legislature was not satisfied with the decision in Maris’s Estate. By the Act of May 25, 1939, P. L. 201, it is provided that in trusts becoming *199effective thereafter provisions directing that extraordinary dividends in stock or cash should be treated, in whole or in part, either as principal or income, should be valid and enforceable. Thereafter the Estates Act of 1947, §6, was amended to provide that a direction or authorization to apply to principal in whole or in part extraordinary dividends should be valid. The doctrine of the Maris case was repudiated by the legislature, at least as to trusts thereafter created.’’ (Emphasis supplied.)
It is important to note that both the 1939 and the 1947 Acts which changed the Rule against Accumulations were limited to extraordinary stock dividends and made no reference to small or ordinary stock dividends.
Finally, in 1956, the Statute or Rule against Accumulations, as set forth in the Estates Act of 1947, supra, was amended effective April 1, 1956, P. L. 1073, to provide that: “No direction or authorization to accumulate income shall be void, except . . . [u]pon the expiration of the period allowed by the common law rule against perpetuities as measured by actual rather than possible events, . .
With certain exceptions, not here relevant.
Emphasis in original.