Eley's Appeal , 1883 Pa. LEXIS 158 ( 1883 )

Mr. Justice Stekbett

delivered the opinion of the court,

The fund for distribution accrued from the coal lease executed by the surviving executor of JameS Eley, deceased, pursuant to the power contained in the last will and testament of said deceased; and the main question is whether, under the provisions of the will hereinafter referred to, that part of the-fund, in which appellants are respectively interested, is to be treated as capital or income.

In the body of his will, the testator gave absolutely to each of his nine children, except his son John, and to the children of his deceased daughter Jane, one tenth part of all his property, real, personal and mixed. He also gave a like portion of his estate to the children of his son John, to be equally diviJed among them at the death of their father; and further directed that the portion thus given to his grandchildren should be held in trust by his executors during the lifetime of liis sou John S. Eley, “ the interest or income arising from the same” to be paid to his said son, by the executors, during his natural life. The testator authorized his executors “ to sell and dispose of all ” his real estate, “ or to lease the coal upon or under the same, and to convey the same to the purchasers by good and sufficient instruments of writing ;” provided, however, that before selling or leasing the same, the executors shall first have “the written consent of owners of six-tenths of the premises,” and provided also that a specified portion of the surface shall not be sold for fifteen years after testator’s death.

By a codicil to his will, testator revoked the bequest to his daughter Elizabeth Weaver, who, in the meantime, had intermarried with John Detweiler, and in lieu thereof, directed that portion of his estate which, in the body of his will, he had given to her, to be held in trust by his executors during her natural life, “ the interest or income arising ” therefrom, to be paid to her during her natural life. By a subsequent codicil, he also revoked the bequest to his son Thomas, and, in the same con-n.ection, devised and bequeathed the same one-tenth part of his estate to Abraham Lines, in trust, nevertheless, to pay to testator’s son Thomas, all the income arising from the said portion during the natural life of said Thomas, and upon his death, to convey in fee the said portion to the proper heirs of said Thomas Eley.”

At the time of his decease, the testator’s estate consisted chiefly of a tract of land in the heart of the Wyoming coal field, valuable for agricultural, but vastly more so for coal mining purposes. It is very evident that the general purpose of the testator was to provide for his children by giving them an estate in the land, and in order that they might the better enjoy the same, he invested his executors and the survivor of them, with power to sell and dispose of all or any part of the real estate, “ or to lease the coal Upon or under the same,” but not until “ the ownels of six-tenths of the premises ” gave their written consent thereto. The requisite majority of owners deeming it advisable to lease the coal, signified their election to do so by joining with the surviving executor in the lease, from which the money for, distribution was realized. Seven of the ten shares were absolute gifts, and • as to them, of course, no question arose. The other three were given to the executors, in trust for the benefit of appellants, respectively, during life ; and, as already stated, the question is whether the money accruing from the lease is to be considered income in the sense in which that word was employed by the testator, or capital to be invested, and only the interest thereof paid to appellants respectively..

In seeking for the testator’s intention, we derive little or no assistance from that class of cases in which it has been properly held that-a lease of the exclusive right to mine and remove coal or other minerals, without limitation as to quantity or time, is practically a sale of the coal or other mineral in place, and consequently a sale of a portion of the land itself. The word'income means the gain which accrues from property, labor or business. In its ordinary and popular meaning, it is strictly applicable to the periodical payments, in the nature of rent, which are usually made under coal and other mineral leases, and we have no doubt it was used in that sense by the testator. In the absence of any provision, express or implied, that the payments in the nature of rent shall be accumulated for the -ultimate benefit of those in remainder, it would be a strained and unnatural construction of the will to hold that he intended to give appellants only the annual interest on the installments of rent. The fact that they are tenants for life by virtue of the will of the owner, and not merely by operation of law, as in the case of tenant by the ■ curtesy, &e., must not be lost sight of. In the latter case, the right of the life-tenant is absolutely fixed and determined by law, while in the former, the extent of the rights appurtenant to the life estate, must be determined by the will construed in accordance with the intention of the testator. If testamentary life-tenants are authorized by the will, creating their estate, to open and work new mines or quarries, or what is the same thing, to lease the minerals for that purpose, the remaindermen are necessarily without remedy for any in jury that may be thus done to their inheritance, because the will by which the life tenancy, with its incidents, was created is paramount, and they take, subject to all the rights and privileges of the life-tenant. The reason why tenants for life, as a general rule, cannot open and operate new mines, is because it would be a lasting injury to the inheritance ; but their right to operate previously opened mines, and work the same even to exhaustion, cannot be questioned : Neel v. Neel, 7 Harris 323 ; Irwin v. Covode, 12 Harris 162 ; Griffin v. Fellows, 32 P. F. Smith 114; Westmorelaud Coal Co.’s Appeal, 4 Norris 344. By empowering his executors, with the written consent of six-tenths of the owners, to lease the coal for mining purposes, the testator virtually gave appellants the same rights they would have had if the mines had been opened and operated in his lifetime. The instrument, by which their equitable life interest was created, authorized the leasing of the coal, and in the absence of any provision to the contrary, they are entitled by virtue of their life interest to participate in the proceeds or income accruing from the lease. As- has already-been observed, there is no provision for the investment of proceeds of the lease for the benefit of those in remainder. " In Daly v. Beckett, 24 Beavan 114, one of the questions was whether the power contained in the deed of settlement was sufficient to authorize the lease of unopened mines, and the other was whether the tenant for life was entitled to the proceeds of the mines opened under the lease, or only the interest thereon. After deciding the first point in the affirmative, and sustaining the lease, the Master of the Bolls says : “ With respect to the second point, as to how the produce of the mine is to be considered, I must treat it ... as if this was an ordinary power to lease the mines and minerals, in which case all the authorities establish this, that the produce of the mines is made part of the annual profits of the estate, and that whether in royalties, or in whatever other way it is produced, it forms part of those profits,” and it was accordingly held that “ the royalty reserved by the lease was in the nature of rent, and was payable to the tenant for life, and did not form corpus.”

In any view that can reasonably be taken of the subject, we are satisfied the testator intended "that appellants should each receive, during their respective lives, a full share of the proceeds of the coal lease, and not merely the interest thereof. If, under the power contained in the will, the land, including the coal, had been sold, it will not be questioned that appellants would each have been entitled to the interest on one-tentli of the consideration money during the term of their natural lives respectively : and wé think it equally clear that when the requisite number of the beneficiaries under the will elected to avail themselves of the power given them to lease the coal, they are each entitled to one-tenth of the proceeds or income derived from the lease. In their ordinary signification, and as the testator himself doubtless intended they should be understood, the expressions, “ income arising from the same,” “ income arising from the tenth part of my estate,” and “ all the income arising from said portion,” as applied to a lease like the one before us, mean the current proceeds of the lease, and not the interest which would accrue from the investment of the proceeds.

Wo are not prepared to say there was error in refusing to hold that Thomas Eley, one of the appellants, took an estate in fee under his father’s will. It is impossible to mistake the intention of the testator in revoking and changing his bequest to his son Thomas, as he did in the codicil. Instead of giving him one share, absolutely, as he had done in the body of the will, he devised the whole to a trustee for the purpose of securing the payment of the income to Thomas during his natural life, and at his death, the conveyance of the corpus to those who may then, be his legal heirs. It is a mistake to suppose that the trust is not an active and continuing one. The legal title is vested in the trustee, and upon him are devolved active duties, such as the care and management of the estate, collecting and paying over rents, income, &c.

Decree reversed at the costs of the appellees, and it is ordered that the record be remitted with instructions to distribute the fund in accordance with this opinion. i