Dundas's Appeal

64 Pa. 325 | Pa. | 1870

The opinion of the court was delivered,

by Agnew, J.

— The principal question in this case is presented by the 1st assignment of error, that the Orphans’ Court erred in not ordering a resale of the premises No. 1333, on Walnut street. The sale was made under a power contained in the will of the late James Dundas, authorizing his three executors, or a majority of them, to sell his real estate at public or private sale. Under the 13th section of the Act of 24th of February 1834, this will vested in the executors the same powers and authority over such estate, for all the purposes of sale and conveyance, and also of remedy by entry, action or otherwise, as if the same had been devised to them to be sold: Purd. 282, pl. 62. In pari materia is the 12th section of the same act, which vests in the executors all powers, authorities and directions relating to real estate, not given to any one by name or description, but requires these powers, &c., to be exercised under the control and direction of the Orphans’ Court having jurisdiction of the account of the executors: See Wood’s Estate, 1 Barr 371. According to numerous decisions, the effect of such a power of sale, in a will, is to convert the realty into personalty, so much so that the interest of the heirs is not liable to lien or sale by the sheriff: Allison v. Wilson, 13 S. & R. 332; Morrow v. Brenizer, 2 Rawle 188 ; Hannah v. Swarner, 3 W. & S. 230; Silverthorn v. McKinster, 2 Jones 72. It broke the descent (said Judge Bell in the last case), and vested the estate in the executors, leaving to the legatees but an interest in the proceeds. Unquestionably the effect of this legislation and these decisions is to render the executors accountable for the real estate thus placed in their hands for sale, conferring in this respect a charge and management of it. The 4th section of the Act of 29th March 1832, relating to Orphans’ Courts (Pamph. L. 190), provided that the jurisdiction of the Orphans’ Courts should extend to and embrace (inter alia), “ generally all cases within their respective counties, wherein executors, administrators, guardians or trustees are or may be possessed of, or undertake the care and management of, or are in any way accountable for any real or personal estate of a decedent, and such jurisdiction shall be exercised in the manner hereinafter provided.” The 19th section of the Act of 16th June 1836, relating to the jurisdiction and powers of the courts (Pamph. L. 792), is a substantial re-enactment of the same provisions, though not exactly word for word, as stated by Gibson, C. J., in Lewis v. Lewis, 1 Harris 82. The Act of 1836 omits the words “ or undertake the care and management of.” It is an evident, but immaterial omission, as the Act of 1836 contains no repealing clause. This provision of the Act of 1832 has undergone judicial scrutiny in Wimmer’s Appeal, 1 Whart. 96 ; Fretz’s Appeal, 4 W. & S. 433: Brown’s Appeal, 2 Jones 333 ; Lewis v. Lewis, 1 Harris 79, and perhaps in other cases, in all which the powers of the Orphans’ Court are looked upon with favor, on account of their necessity and their fitness. It would appear from this legislation that the Orphans’ Court has power to control executors and other testamentary trustees in the exercise of their powers over real and personal estate. There would seem to be good reason, therefore, to hold that the Orphans’ Court has power to review, set aside, and if necessary to order a resale of real estate made under a testamentary power. But the learned judge of the Orphans’ Court supposed too much when he asserted that it might be his duty to order a resale in the ease then before him. The settlement of the account of the executors was all he had before him, and he could do but one of two things, either strike the charge for the proceeds of the sale of the house and lot No. 1333 out of the account, or surcharge the executors with the additional price it would have brought at a fair sale. He would do the former if he thought the sale ought not to stand, and order the charge to lie over for a future settlement, in order to prevent the parties interested from being estopped from contesting thé sale. He would do the latter if he thought a surcharge only should be made.

- That he could not set aside the sale and order a resale is evident from several considerations. The parties were not all before him. This was a sale by authority of the testator, and needed no confirmation of the court, or order to convey. The deed passed the estate directly to the purchaser, and constituted an inviolable contract, which could be reached only by a judicial proceeding to which the purchaser should be a party as well as the executors. By the express terms of the Act of 1832 the power of the Orphans’ Court could be exercised only according to its direction, to wit: “ Such jurisdiction shall be exercised in the manner hereafter provided,” or according to the Act of 1836: “ And such jurisdiction shall be exercised under the limitations, and in the manner provided by law.” That manner is set forth in the 57th section of the Act of 29th March 1832, which prescribes that “ the manner of proceeding in the Orphans’ Court to obtain the appearance of a person amenable to its jurisdiction, and to compel obedience to its decrees, shall be as follows: “ On the petition to the- court of any person interested, whether such interest be immediate or remote, setting forth facts necessary to give the court jurisdiction, the specific cause of complaint, and the relief desired and supported by oath or affirmation, the Orphans’ Court, or any judge thereof in vacation, may award'a citation returnable at a day certain, not less than ten days after the issuing thereof,” &c. Conceding then, for argument’s sake, that the conveyance to Mrs. Agnes Dundas Lippincott was an unfaithful performance of the testamentary authority, because she is the wife of one of the executors, yet here is the deed to her made under the authority of the will for a valuable consideration, passing from her into the hands of the executors, which cannot be set aside except by a proceeding to call her in as well as the executors. Clearly the jurisdiction of the Orphans’ Court can be exercised only on petition of the complainants, setting forth the will, the power and the execution of it, and the specific cause of complaint, in order to bring in the parties to answer the specific charge, and to enable the Orphans’ Court to make them answerable to its jurisdiction, and to enforce its decrees. The Orphans’ Court, within the limits of its jurisdiction, is strictly a court of equity (says Gibson, C. J.), proceeding by petition and answer, and enforcing its decrees by attachment, sequestration or execution, as the case may require: Lewis v. Lewis, 1 Harris 82; Wimmer’s Appeal, 1 Whart. 104. In such a proceeding the Orphans’ Court can grasp the controversy, set aside the sale, order the purchase-money to be restored, and direct a resale by the executors under the will. The sale to Mrs. Lippincott is not void because she is a married woman. It could be avoided only on the ground that she is the wife of one of the executors, and even then she would be entitled to a return of the price she had paid. That a married woman can take a deed with the assent of her husband is law as old as Lord Coke’s time. See authorities collected in Williams’ Appeal, 11 Wright 309, 310; also Bortz v. Bortz, 12 Id. 382, and Cowton v. Wickersham, 4 P. F. Smith 302. It is evident, therefore, that in a proceeding merely to adjust the account of the executors, and ascertain a balance for distribution, to which the purchaser of the real estate is no party, in which the parties have not been brought in to answer a specific complaint against the sale itself, and in which no decree can be made to embrace the whole controversy, the Orphans’ Court cannot set aside the sale and order a resale. If, in the judgment of the court, it should be necessary to proceed against the sale itself, instead of striking the charge out of the account, it would have the power to suspend the settlement, and order the exceptants to proceed at once to contest the sale.

The next assignment of error relates to the right of Mrs. Lippincott to purchase under the order of the Orphans’ Court permitting her to become a bidder. We cannot doubt that a sale by a trustee to his own wife would be set aside on the application of the cestui que trust, not on the ground of coverture, but of her relationship to the trustee. It would be evidence of unfairness quite as much as if the sale were made to the trustee himself, and falls within the spirit of the rule which forbids his own purchase: Hill on Trustees 535, 536; Lewin on Trusts 376 to 383; 2 Story’s Eq. §§ 1257, 1261, 1265. But we cannot agree that the Orphans’ Court has no power to make the order permitting Mrs. Lippincott to bid. The jurisdiction is conferred by the 4th section of the Act of 1832, already referred to. Joshua Lippincott, the executor, was vested with the estate, and made accountable for the execution of his power to sell it, and the petition of Mrs. Lippincott concerns his execution of the power, and his accountability for the estate sold. Mrs. Lippincott’s right to purchase was distinct from her husband’s power to sell, and but for. the influence of her relation upon him, she had a right to bid for the property. If for any sufficient reason it became necessary for her to exercise her personal right, such an order would be necessary to protect the estate,' the trustee and her purchase; while it would draw the sale directly within the power of the court to supervise it to the interest of all concerned. If necessary, the court could order it to be made by the trustee under the supervision of its own officer. The Orphans’ Court, within the scope of its powers, proceeds as a court of equity, and there authority to show that a court of chancery may, on bill filed, allow a trustee -to bid at his own sale; and the reason undoubtedly is, that the bill draws to the court the supervision of the sale under such directions as the chancellor may deem necessary to protect the interests of every one concerned: Campbell v. Walker, 5 Vesey Jr. 678; Michoud v. Girod, 4 Howard 557-58; Lewin on Trusts 381, 382; Hill on Trustees 536. The power is a delicate one and should always be cautiously exercised, and the sale itself watched,with jealousy. In this case the order to permit Mrs. Lippincott to bid was made in August 1865, the sale in September, and the deed delivered in October 1865, and Mrs. Lippincott entered into immediate possession. These facts were known to the appellants, yet no steps were taken to set aside the sale, and the first time when objection is raised was in the settlement of the account in 1867. Under these circumstances, the auditor having found no fraud or unfairness in the sale, and the court having no power in this proceeding to order a resale, it was not error in the court to rely on its own order permitting Mrs. Lippincott to bid, and to surcharge the executors with the full price the premises would have brought at a fair sale, instead of striking out the charge from the account, and sending the parties to a proceeding to set aside the sale. This does justice to all the parties.

The fact that the auditor found no fraud or unfairness, and that this finding was sanctioned by the court, had great weight in the decision of the case. The measure of liability to which the appellants can hold the executors is that only which the testator himself exacted. They enjoy nothing of his except under his will, and can claim no higher duty of his trustees than he did. The will is the law of their rights as of the executors’ duties. James Dundas gave his executors a large discretion. Two of the three could execute the power, they could sell at private as well as at public sale. They could sell on his authority alone without leave of any court; and he expressly willed that they should not be personally liable for the exercise of these powers, provided their acts were done in good faith and intention. There being no creditors, he had a right to say that this should be the measure of liability as to those who claim his bounty. This is fully settled by McNair’s Appeal, 4 Rawle 148, where the distinction is expressly taken between creditors and legatees, and fortified by authority. In Moore’s Appeal, 10 Barr 435, Judge Rogers laid down the rule, “ that a trustee is not liable for more than he receives of the profits of the estate, for he is considered in the character of a stakeholder or bailee. If you wish to surcharge them beyond the actual profits you must prove satisfactorily supine negligence or willful default.” This was approved of in Springer’s Estate, 1 P. F. Smith 344; and see Konigmacher v. Kimmel, 1 Penna. 207; Calhoun’s Estate, 6 Watts 185. Looking at the circumstances and the will, .we think the court went as far as the evidence warranted, in surcharging the executors, a surcharge justifiable under the evidence only on the ground that the purchaser was the wife of one of the executors, making it the duty of the court to scrutinize the exercise of the power of sale with extreme vigilance.

All the other exceptions appear to have been disposed of by the court correctly, in view of the terms of the will, and the decree of the Orphans’ Court is therefore affirmed at the costs of the appellants.