Estate of Dundas

136 Pa. 318 | Pennsylvania Orphans' Court, Philadelphia County | 1890

Opinion,

Mr. Justice Stbrrett:

Appellant claims under the will of James Dundas, deceased, proved July 10,1865, in which the testator directed his residuary estate to be divided into forty equal parts or shares, five of which he gave to the four children of William H. Dundas, one of whom is appellant. He thus became entitled to one fourth of five fortieths, or one thirty-second of said residuary estate. On September 9, 1865, an inventory and appraisement of the estate was duly made and filed in the register’s office. In January, 1866, appellant, then about twenty-four years of age, received from Mrs. Lippincott, another of the residuary legatees, $1,500, in anticipation of distribution. Out of the first distribution of income, made about six months after testator’s decease, he received his share, $533.82, and out of the next distribution made six months later, he received nearly $5,000.

Appellant’s first thought, almost immediately after testator’s death, appears to have been to attack and set aside the will, on the ground of undue influence exercised by one of the appellees and her husband. Eminent counsel were consulted as to the propriety of that course, but it does not appear to have been encouraged. Having abandoned the idea of contesting the will, he then consulted several others in regard to the propriety of selling his interest in the residuary estate, and in that connection he and one of his legal advisers, in 1865, examined the inventory and appraisement. At that time, his attorney informed him that the assets of the estate were appraised at the lowest figure to save collateral inheritance tax. On several occasions he was advised not to sell, but notwithstanding that advice, and the reasons suggested in support of it, he persisted in endeavoring to find a purchaser. Shortly after he received his share of the second distribution, in July, 1866, he wrote to Mr. Joshua Lippincott, one of the executors, proposing a sale to him. In that letter, referring to a suggestion that liad been made by his sister, he said: “ As regards not allowing me enough, and saying in aftertime that I did not receive its proper value, all I can say is, that I have too much confidence in you as a high-toned gentleman, and am willing to accept whatever you consider a fair valuation.” In his reply, Mr. Lippincott emphatically declined to entertain the proposition to purchase, giving as a reason therefor, that being an executor he could not do so. He suggested, however, that appellant might sell his interest to others who were entitled to participate in the estate. As the result of that correspondence, one or two visits to Philadelphia, and conferences with the executors, etc., appellant arranged to sell his remaining interest to Mrs. Lippincott, wife of one of the executors, and also a residuary legatee.

Under the will she was entitled to three fortieths, and her two children together to twenty-eight fortieths, thus making the holding of the family more than three fourths of the residuary estate. A number of interviews and conferences had previously taken place between appellant and Mr. Smethhurst and Mr. Lippincott, two of the executors, in regard to the value of the estate, which finally culminated in a calculation prepared by the executors upon three different bases. This was submitted to appellant and was finally agreed to by him. The sale was consummated early in November, 1866, and the consideration, $10,000, paid by Mrs. Lippincott out of her private estate.' At that time, appellant expressed himself as fully satisfied with the transaction. This is evidenced by his written declaration delivered to the purchaser with his deed. In that he says: “ I have examined and considered the condition of the estate of the late James Dundas, and certain statements showing the present value thereof furnished to me by the executors, all information relating to the subject having been freely given me by the executors of James Dundas, and I am satisfied that a fair valuation of the whole residuary estate in which I am interested, including the principal of the annuities hereafter to fall in, is the sum of $441,682.40, and upon this basis I have requested Mrs. Agnes Dundas Lippincott to purchase of me my one fourth of five fortieths of said residuary estate, which she has agreed to do, and I am acting in this sale of my residuary estate with a full knowledge of my interest in said estate, and without any persuasion or influence of any kind.”

The first intimation of any dissatisfaction with the sale of his interest to Mrs. Lippincott, was given to her counsel in December, 1868, when appellant and his counsel appeared at the audit of the first account of the executors and notified the auditor that they intended to make an application to set aside the conveyance made more than two years before. Early in 1869, both of the learned counsel who appeared for appellant before the auditor were informed by Mrs. Lippincott’s attorneys that she would re-convey the interest she had purchased from appellant upon re-payment of the purchase money with interest. No notice was taken of this offer, and in April, 1869, it was renewed in writing, with a limitation as to the time within which it might be accepted. It was not accepted, nor was there any application made for a modification of the offer, or an extension of the time within which it might be accepted.

In April, 1871, appellant’s petition, in which his grievances are fully set forth, was presented to the Orphans’ Court, praying that the conveyance of his interest in the residuary estate to Mrs. Lippincott be set aside, and that he be permitted to participate in the distribution of said estate as though said deed had never been made. Thereupon Mrs. Lippincott and her husband, and the surviving executors of the will, appeared and answered the petition, denying all the allegations of fraudulent valuation, misrepresentation, etc., upon which the court was asked to set aside the conveyance. The issues of fact raised by the petition and answers were referred to an auditor, whose very able and exhaustive report, and the action of the court thereon, are now before us.

On the main questions of fraudulent valuation and misrepresentation charged in the petition, the learned auditor’s conclusions, as stated by himself, are as follows:

“ The representation of the value of the estate, and the interest therein proposed to be sold, the auditor finds was incorrect in the premises upon which the estimate of value was founded, and in the methods through which the resultant estimate was reached.....The auditor, however, after a most thorough and careful and repeated examination and consideration of the actual and absolute or naked facts of the case, which covered a very wide range, cannot find that there was in this incorrect representation and valuation, fraud upon the part of the executors who had thus placed themselves in such a relation of confidence to the seller. The auditor finds as a fact that this representation of the condition of the estate, and of the value thereof, and of the seller’s interest therein, was incorrect, but that it was not fraudulent. It was a mistake, and such a mistake as would not unnaturally arise from the peculiar character of the assets of the estate and its complicated nature, and the complex relations of the parties concerned. The auditor is of opinion, and so finds, that, however mistaken the executors were, yet they honestly believed that the representations they made to the seller, the petitioner, were correct and fair for the purposes in view.”

These conclusions of fact, we think are quite as favorable to the appellant as the evidence warranted. The facts and circumstances from which they are drawn by the auditor are so fully and clearly set forth in his report, and in the opinion of the court, that we have deemed it-unnecessary to do more than outline them sufficiently to indicate the relation of the parties to each other and the principles involved in the contention.

' While the record is somewhat voluminous, and the specifications of error very numerous, the controlling questions are very few. An examination of the record, and full consideration of the exhaustive arguments of counsel, have led us to the conclusion that the cardinal question in the case is, as tersely stated by the learned counsel for appellees: “ Can a residuary legatee, being the wife of an executor of an estate, purchase the share of another residuary legatee, through the medium of her husband, in the absence of fraud; or, does the rule which forbids a trustee from buying at his own sale, apply to such a case, and render the sale voidable at the will of the vendor?”

There is no doubt as to the facts of which the first branch of this question is predicated. The relation of the parties to each other is strictly correct. As the learned auditor has correctly found, no fraud was practiced or even meditated; nor was there any mistake, on the part of the executors, or either of them, that can, under the circumstances, be regarded as tantamount to fraud. Assuming, for the sake of argument, that there was a mistake in their mode of estimating the value of the residuary estate, it was, as the learned auditor says, “ such a mistake as would not unnaturally arise from the peculiar assets of the estate,” etc.; and, “ however mistaken the executors were, they honestly believed that the representations they made.....were correct and fair.” The facts being so, there is neither reason nor authority for the position that, under such circumstances, and in the absence of fraud, actual or constructive, one legatee may not purchase the interest of another legatee. It is a mistake to contend that the rule which forbids a trustee from buying at his own sale, applies to such a case, and in any manner renders the sale either void or voidable, at the will of the vendor. Without questioning the soundness of the authorities relied on by appellant, it is sufficient to say, that they are inapplicable to the controlling facts of this case.

In connection with his review of the facts and circumstances leading up to the sale, the learned judge of the Orphans’ Court, after fully considering the relation of the parties to the transaction, and other questions involved, came to the conclusion “ that the parties to the sale stood at arm’s length, and were, in law, equally matched; ” that there was nothing in their relation to each other, or in the action of the executors, that ought to have the effect of rendering the sale either void or voidable; that it was not void, because it was not tainted with fraud, nor was it voidable at the election of appellant on the ground of unintentional mistakes “ in the premises upon which the estimate of value was founded, because appellant agreed to sell and Mrs. Lippincott agreed to buy at the price ascertained by the statement and estimate furnished and submitted by the executors, and that, in the absence of fraud, or such mistake as is tantamount thereto, both parties were bound by their agreement to accept, as correct, the statement and estimate which was honestly prepared and submitted by the parties whom they voluntarily selected for that purpose, especially after approval of the estimate and execution of the contract of sale based thereon.”

These conclusions were warranted by the facts found by the auditor and the authorities cited by the learned judge in his able and exhaustive opinion. It is unnecessary to make further reference to the facts of the case, or to review the authorities cited and relied on as applicable thereto. Enough has been said to show that the opinion of the Orphans’ Court is an ample vindication of the correctness of its decree. The sale in question was clearly not void, because the fact that it was not tainted with fraud has been conclusively established. Assuming, for the sake of argument, that it was voidable at the election of appellant because of unintentional errors in the estimate by which the value of his interest in the residuary estate was ascertained, it was his duty to act with reasonable promptness. That was not done. His delay was inexcusable, especially in view of the offer of Mrs. Lippincott to re-eonvey on payment of the amount he received from her with interest. For reasons given in the opinion above referred to, we think the court below was also right in holding that appellant was estopped by his laches from assailing the validity of his conveyance.

Decree affirmed, and appeal dismissed at the coste of appellant.