Winsor's Estate

Stearne, J.,

The exceptions in this case are to an opinion suit appeals from appraisement of transfer inheritance tax. The primary question is one of blending; and the secondary question relates to the legality of the tax appraisement and assessment.

The rule is that when the instrument exercising the general power of appointment goes into effect, the appointee takes the estate under and by virtue of the original instrument creating the power and not under the instrument of exercise: Finn’s Estate (No. 2), 18 Dist. R. 408; Huddy’s Estate, 236 Pa. 276.

There is no blending where the will is silent as to testator’s intent, and the appointment is exercised only by virtue of the operation of the statute: Mitchell’s Estate, 7 D. & C. 387; Huddy’s Estate, 236 Pa. 276.

By legislative enactment (Wills Act of June 7, 1917, § 11, P. L. 403, re-enacting Act of June 4, 1879, § 3, P. L. 88), general devises or bequests of a testator are declared1 to operate as an exercise of all general powers of appointment, in the absence of a contrary intent in the will.

A testator may choose to transfer the appointed estate to his own, make it a part thereof and dispose of the coalesced funds as one. His appointees *429then take as nominees of the donee of the power and as a part of his estate, instead of that of the original donor. Whatever strong reasoning may have existed to the contrary (see dissenting opinion of Lamorelle, P. J., McCord’s Estate, 2 D. & C. 130), this principle was firmly and decisively settled by McCord’s Estate, 276 Pa. 459.

Real difficulty arises in seeking to discover the intent of a testator who uses language which creates confusion as to whether he intends to blend or whether he has treated his will merely as an instrument to pass his own individual estate, as such, to designated beneficiaries, and, at the same time and by the use of the same words, to pass the appointed estate, as such, to the same persons or for the same objects as he provides for his individual estate.

Consideration must be given, in discovering intention, to extrinsic facts and circumstances which show, or tend to indicate, intention to blend; sic., where a testator, in disposing of both estates, bequeaths legacies in excess of the value of his own estate: South’s Estate, 248 Pa. 165.

Likewise, attention must be given to testator’s provisions, expressed or implied, as to the payment of debts. It is important, as evidence of intention, whether such debts are payable out of the combined estates or are relegated to the individual estate: Hagen’s Estate, 85 Pa. Superior Ct. 123; 285 Pa. 326; Morton’s Estate, 10 D. & C. 255.

Another element of importance is the location of the disposititive clause, as well as the intended scope of its operation: Hagen’s Estate, supra; Dohan’s Estate, 3 D. & C. 182; Haven’s Estate, 5 D. & C. 494.

As concisely stated by Gest, J., in Tobey’s Estate, 10 D. & C. 227, 229: “After all, blending is a question of intention. . . .”

The leading cases where the language is held to be expressive of an intent to blend are: McCord’s Estate, 276 Pa. 459; Forney’s Estate, 280 Pa. 282; Kates’s Estate, 282 Pa. 417; Twitehell’s Estate, 284 Pa. 135; Com. v. Morris, 287 Pa. 61; Howell’s Estate, 4 D. & C. 526; Tobey’s Estate, 10 D. & C. 227; Morton’s Estate, 10 D. & C. 255.

To recite the controlling language in each of the foregoing cases would add little to this opinion. It suffices to note that in each instance the test applied was to ascertain whether the effect of the disposition was to make the trust estate a part of the testator’s own and then to dispose of both estates as an entirety. Declarations of intent in the preamble, directions to pay to executors for purposes of distribution, payment of debts and deficiency of personal estate to pay legacies are all elements of consideration in reaching the conclusion as to intent to blend.

Illustrative of cases where it has been held that there is no blending are: Hagen’s Estate, 85 Pa. Superior Ct. 123; 285 Pa. 326; Dohan’s Estate, 3 D. & C. 182; Haven’s Estate, 5 D. & C. 494.

In Hagen’s Estate, supra, there was no specific provision for the payment of debts; testator made certain bequests and declarations concerning the disposition of his personal property and then, by the third item in his will, declared that the estate over which he had power of appointment, should be disposed of as part of his residuary estate.

The Supreme Court affirmed the Superior Court in holding that there was no blending. The opinion of Judge Keller is illuminating as to the reasoning of the court: “It will be noted that Christian A Hagen did not direct that the estate over which he had power of appointment by will should be disposed of as part of his estate generally, but as part of his residuary estate. In view of the fact that he had given no direction for the payment of his debts and no *430pecuniary legacies, we think this use of the term significant. Residuary estate is defined to be ‘what remains of a testator’s estate after deducting the debts and the bequests and devises:’ 3 Bouvier’s Law. Dict., 2920; ‘the surplus of the testator’s estate remaining after all the debts and1 particular legacies have been discharged; what remains after the payment of debts, funeral charges, expenses of administration, and legacies:’ 34 Cyc., 1660. His use of the term, — bearing in mind that the will contained no express direction to pay debts, etc., — is indicative of an intention that the fund over which he had power of appointment should not be subject to or used for the payment of his debts, and therefore should not be blended with his estate generally, but should be differentiated so that his debts and any pecuniary legacies which he might give should be chargeable to and payable out of his own estate and that the balance, if any remaining, should be disposed of in the same way that he disposed of the appointed estate.”

In Dohan’s Estate, supra, the words of the will clearly indicated that the only beneficiaries of the appointed estate were those taking under the residuary clauses of the will. While there are directions here as to payment of debts, there is no evidence of intention to make the appointed estate liable for them or for the payment of her legacies.

In Haven’s Estate, supra, there is no direction to pay debts; testatrix made a number of pecuniary bequests to be paid out of her personal estate and left the residue of her estate to her sister; she then declared her will to be an exercise of the appointment she was authorized to make. As pointed out by Judge Henderson (page 496), all of the items down to No. 11 related to her own individual estate; then followed the exercise of the power, showing the intent to give the entire appointed estate to her residuary legatee.

Dohan’s Estate and Haven’s Estate are cited with approval by the Superior Court in Hagen’s Estate.

In the case now before us, the opinion of the Hearing Judge carefully considered all of the foregoing authorities, and has correctly and accurately applied the principles they establish. We agree with him that the case is ruled by McCord’s Estate and Com. v. Morris.

The will says in its preamble: “and intending hereby to exercise any and all powers in me vested. . . .” Testatrix directs the payment of her debts and funeral expenses; she bequeaths legacies in excess of the aggregate amount of her individual estate, and in her residuary clause provides for the disposition of “all the rest, residue and remainder of my said estate, real, personal and mixed, whatsoever and wheresoever and whether vested or in trust, subject to my power of disposition, limitation or appointment. . . .”

A majority of the court agrees with the Hearing Judge that the effect of Mrs. Winsor’s testamentary disposition was to make the trust estate a part of her own generally, and that both estates were disposed of as an entirety, • and that, therefore, there was a blending.

The objection to the legality of the tax appraisement and assessment rests upon an extremely narrow and technical ground. Appellants claim that the assessment of Nov. 18, 1927, unappealed, became final, and, therefore, the assessment of Feb. 8, 1928 (which is appealed from), is invalid.

Our examination of the record fails to convince us that there is any merit in this contention. All that the assessment of Nov. 18, 1927, attempted or purported to do was to fix the tax upon the suspended item in the prior appraisement. Upon its face the assessment did not seek to settle or finally determine the taxability of the estate generally. It is undisputed that neither *431the fiduciaries, their counsel, nor the register, ever considered that the appointed estate of William Winsor was part of the estate of Elizabeth C. Winsor until the matter was developed at the audit, by the Auditing Judge. According to the testimony, upon the filing of the adjudication, and as a matter of routine, the clerk of the court notified the register that the suspended claim had been adjudicated, whereupon the assessment of Nov. 18, 1927, was made and tax thereafter paid. It is obvious that this was the intended scope of the assessment. It is apparent that there was no contemplation that such assessment was a final and conclusive determination of the taxability of the entire estate. As pointed out by the Auditing Judge, and to which we cannot profitably add, it was not such a final and conclusive appraisement, made by an appraiser, upon his own judgment, deliberately reached upon knowledge of all the facts, as in the Moneypenny Estate, 181 Pa. 309.

It is argued that, even though there be a blending, it is not taxable within the language and meaning of the Inheritance Tax Act of June 20, 1919, §§ A and D, P. L. 521, because the donee did not die “seized or possessed of the property.” Counsel quotes the dissenting opinion of our President Judge in McCord’s Estate, 2 D. & C. 130. Attention is directed, however, to the fact that the Supreme Court did not follow this reasoning, and affirmatively declared (276 Pa. 459), that a donee may appoint to his own estate, whereupon it becomes part thereof, and passes as a part of such estate, the same as any other property which the decedent might own or possess.

The exceptions are dismissed.