Willcox's Estate

Citations

• 66 Pa. Super. 182
• 1917 Pa. Super. LEXIS 222

Syllabus

<p>Trusts and trustees — Principal and income — Stock dividend— Decrease of booh value of stock — Reimbursement of principal.</p> <p>When the stock of a corporation is by the will of a decedent held in trust by a trustee to pay the income to one person for life, and the principal over to a remainderman, and the corporation at the date of the death of the decedent has a large surplus, so .that the book value of the shares is above par, and four years after the death of the life tenant, and after a large addition had been added to the surplus during the life tenancy, the company declares an extraordinary stock dividend equalling practically the amount of the surplus earned since the death of the testator, and at the same time increases its capital stock, selling a large number of the new share_s at less than the previous book value of the shares, with the result that all of the shares of the company after the transaction is completed, have a less book value than at the date of the death of the decedent, the stock dividend awarded to the trust estate is not to be distributed wholly to income, but enough of the stock must be set aside to reimburse the principal for the loss it suffered by reason of the stock dividend in connection with the stock increase, but not for any loss due to the sale of new stock at less than the value of the old stock.</p>