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Attorney(S)

J. Roy Lilley, with him Lilley Wilson, for appellant. John P. Vallilee, for appellee.

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Frost Estate — Supreme Court of Pennsylvania (May 27, 1946)

Factual and Procedural Background

The testatrix executed a will dated June 9, 1942, which (relevant to this appeal) directed her executor to sell her General Motors stock and to divide "the proceeds" equally between her brother, F. Wyatt Frost, and her sisters Annie Frost Scheide and Virginia Frost Lintern. The will also bequeathed to the brother "any money I have in the bank."

At the date of the will the testatrix owned ninety shares of General Motors stock. She sold that stock on April 27, 1944, for $5,031.35 and deposited the sale proceeds in her checking account. A few days later she transferred all but $500 of these funds into her savings fund account, where other monies were also deposited, and the funds remained there until her death on July 29, 1944. At death $290.59 remained in the checking account, but it could not be ascertained with certainty that that balance was part of the $500 retained.

The auditing judge found that $4,531.35 of the $5,031.35 proceeds were traced and identified in the savings account but that the $500 left in checking was not sufficiently traced. He awarded the traced $4,531.35 in equal one-third shares to the brother and the two sisters. The brother excepted and appealed. The appeal (No. 71, Jan. T., 1946) was from a decree of the Orphans' Court of Bradford County (Sept. T., 1945, No. 39). The Supreme Court affirmed the decree.

Legal Issues Presented

Whether a bequest of the "proceeds" of specific property is adeemed by the testator's sale of that property where the proceeds may be traced and identified.

Arguments of the Parties

Appellant (Brother — F. Wyatt Frost)

Claimed entitlement to the entire deposit in the savings fund account under the clause of the will bequeathing to him "any money I have in the bank."

Appellees (Sisters — Annie Frost Scheide and Virginia Frost Lintern)

Contended that the gift was of the "proceeds" from the sale of the stock and that those proceeds had been traced and identified in the savings fund account; therefore the bequest was not adeemed and the proceeds should be divided equally among the three legatees.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Black's Estate, 223 Pa. 382, 72 A. 631	Support for the principle that a bequest of "proceeds" is not adeemed when the proceeds can be traced and identified.	Cited by the court as authority supporting the decision that the traced proceeds are not adeemed and should be distributed according to the will.
Tweitmann's Estate, 293 Pa. 202, 142 A. 210	Support for the principle that a bequest of "proceeds" is not adeemed when the proceeds can be traced and identified.	Cited by the court as authority reinforcing the conclusion that the traced proceeds remained the subject of the testamentary gift and should be divided as directed.

Court's Reasoning and Analysis

The court framed the central question as whether a bequest of "proceeds" is adeemed by the testator's sale when those proceeds may be traced and identified. It emphasized that the gift in the will was not a specific bequest of the stock itself but a bequest of the proceeds after sale by the executor.

The court reviewed the facts found by the auditing judge: the stock was sold during the testatrix's lifetime; the sale produced $5,031.35 which was deposited in her checking account; all but $500 of that amount were transferred into a savings fund account (mixed with other monies) and remained there until death; $4,531.35 of the proceeds were traced and identified in the savings account, while the $500 retained in checking could not be traced with sufficient certainty.

Applying the legal principle (as supported by prior Pennsylvania cases cited in the opinion), the court concluded that where proceeds of a sale of specifically devised property are traceable and identifiable, the bequest of those proceeds is not adeemed by the testator's sale. The court therefore accepted the auditing judge's finding that $4,531.35 had been traced and identified and agreed that that sum should be distributed under the testamentary provision dividing the proceeds. The court agreed that the $500 remaining in checking had not been sufficiently traced to be treated as part of the testamentary "proceeds."

Holding and Implications

Holding: The decree of the Orphans' Court was affirmed. The court held that a bequest of the "proceeds" of specific property is not adeemed by the testator's sale where the proceeds may be traced and identified.

Implications:

The direct effect: the audited sum of $4,531.35 (the portion of the sale proceeds the court found traced and identified in the savings account) was ordered distributed in equal one-third shares to the brother and the two sisters. The decree was affirmed at the cost of the appellant.
The court relied on existing Pennsylvania authority (as cited) for the stated principle; the opinion applied those authorities to the facts rather than announcing a new doctrinal rule beyond the cited holdings.

Citation details drawn from the provided opinion: Supreme Court of Pennsylvania, argued April 10, 1946; opinion by Mr. Justice Allen M. Stearne, May 27, 1946. Appeal No. 71, Jan. T., 1946; decree of Orphans' Court, Bradford County, Sept. T., 1945, No. 39.

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Frost Estate.

Wills — Construction — Specific bequest — Ademption.

A bequest of the "proceeds" of specific property is not adeemed by the testator's sale where the proceeds may be traced and identified.

Argued April 10, 1946.

OPINION BY MR. JUSTICE ALLEN M. STEARNE, May 27, 1946:

The question presented by this appeal is whether a bequest of "proceeds" of specific property is adeemed by a testator's sale where the proceeds may be traced and identified. The court below decided that in such circumstances the gift was not adeemed.

Testatrix provided by her will: "To my brother F. Wyatt Frost I give and bequeath any money I have in the bank. I direct my executor F. W. Frost to sell my General Motors stock as soon as may be done to advantage in his discretion, and the proceeds be equally divided between him and my sisters Annie Frost Scheide and Virginia Frost Lintern."

The death occurred July 29, 1944; the will was dated June 9, 1942; at the date of the execution of the will testatrix owned ninety shares of General Motors stock; on April 27, 1944, she sold the stock for $5,031.35; she deposited the proceeds in her checking account; a few days later she transferred all but $500 of this amount to her savings fund account (wherein were deposited other moneys) and where they remained until her death; at the time of the death there remained in the checking account $290.59, but it could not be ascertained with certainty that such cash balance constituted part of the $500 so deposited therein.

The brother claimed the entire deposit in the savings fund account under the clause of the will bequeathing to him "any money I have in the bank." The two sisters contended that since the bequest was one of "proceeds" from the sale of the stock and which had been traced and identified and found in the savings fund account, there was no ademption; that such proceeds should be divided equally among the brother and the two sisters. The learned auditing judge, in a well-considered opinion, decided that of the $5,031.35 proceeds, $4,531.35 had been traced and identified in the savings account, but that the $500 left in the checking account had not been sufficiently traced and identified. He accordingly awarded the $4,531.35 in equal thirds to the brother and the two sisters. This appeal by the brother followed.

We are in accord with the decree of distribution. This was not a specific gift of the stock itself. It was of the proceeds after sale by the executor. The testatrix, however, sold the stock in her lifetime and the proceeds were traced and identified. The learned court correctly decided this case: Black's Estate, 223 Pa. 382, 72 A. 631; Tweitmann's Estate, 293 Pa. 202, 142 A. 210.

The decree is affirmed at the cost of appellant.

FROST ESTATE