36 Temp. L.Q. 121 (1962-1963)
Accounting Considerations of Apportionment by Trustees of Receipts from Stock

handle is hein.journals/temple36 and id is 123 raw text is: TEMPLE LAW QUARTERLY
VOL. 36     NO. 2                                                 WINTER 1963
This article considers the accounting aspects of common-law ap-
portionments between principal and income of trustees' receipts from
trust ownership of securities.'
Despite the fact that the Pennsylvania Supreme Court recently
decided in the Catherwood case' that the common law               of apportion-
ments would no longer apply in many situations, the subject is still a
vital one. The full impact of the Catherwood case has not been divined
as yet and the cut-off date is vague.' Further, there are key jurisdic-
tions still applying non-statutory rules of apportionment,4 and settlors
may still require the application of these rules.
t A.B., Amherst College; LL.B., Harvard University. Member, Philadelphia
Bar. Partner, Korn and Cohan.
1. For a general discussion of the subject of aspects of apportionment see:
Brigham, Pennsylvania Rules Governing the Allocation of Receipts Derived by
Trustees from Shares of Stock, 85 U. PA.' L. Rxv. 358 (1937); Cohan and Dean,
Legal, Tax and Accounting Aspects of Fiduciary Apportionment of Stock Proceeds:
Non-Statutory Pennsylvania Rules, 106 U. PA. L. REV. 157 (1957); Damrau, Ap-
portionment of Stock Dividends in Trust Created Prior to 1945, 15 U. PIrr. L. REv.
34 (1953) ; Faught, Statutory Solution of the Problem of Allocation Between Life
Tenant and Remainderman, 11 TEMP. L.Q. 139 (1937); Nemmers, Key Problems in
the Apportionment of Increase Between Successive Interests in Personalty, 41 MIcH.
L. REv. 815 (1943); Grossman, Mechanics of Apportionment of Receipts from Shares
of Stock, 65 DIcK. L. REv. 179 (1961) presents various apportionment calculations;
3 ScoTT, TRUSTS  236 (2d ed. 1956); RESTATEMENT (SECOND), TRUSTS  236 (1959).
2. 405 Pa. 61, 173 A.2d 86 (1961).
3. A number of cases have arisen since the Catherwood decision asking the court
to clarify the meaning of its dictum that overruled the long line of Pennsylvania cases
holding that a retroactive application of the Principal and Income Act of 1947 is
unconstitutional, see, e.g., Brown Estate, 408 Pa. 220, 183 A.2d 307 (1962); Pew
Trust, (No. 2) 12 Fiduc. Rep. 275 (Pa. 1962); Keasbey Trust, 12 Fiduc. Rep. 145
(Pa. 1962); Curtis Trust, 12 Fiduc. Rep. 205 (Pa. 1962); Reed Trust, 12 Fiduc.
Rep. 144 (Pa. 1962); Hessenbruch Estate, 26 Pa. D. & C. 64 (1961); Heyl Trust,
12 Fiduc. Rep. 9 (Pa. 1962) ; and Semple Trust, 12 Fiduc. Rep. 6 (Pa. 1962). These
last three cases hold that pre-1945 apportionable events are still controlled by the
common law rule.
4. New York, New Jersey and Maryland are examples of such jurisdictions.
See 44 A.L.R.2d 1277, 1287-1292 (1955).


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