Estate of Merkel

131 Pa. 584 | Pa. | 1890

Opinion,

Me. Justice McCollum:

We have carefully examined and considered the several specifications of error filed in these appeals, and the able arguments for and against them.

Lands descend to the heir. The administrator cannot, by virtue of his office, occupy or lease them. The rents and profits accruing from them after the death of the owner belong to the heir, and the administrator is not authorized to receive them. The Orphans’ Court may, on his application, order a sale of the lands for the payment of debts, if the personal estate is insufficient for that purpose. But his powers and duties with reference to them are limited to an application for an order of sale, and to the proper execution of that order when it is obtained.

The rights of the lessor under the lease to Bushong & Co., as well as the lands covered by it, descended to his heirs, and the. transfer to Bushong & Co. of the rents accruing under the lease imposed no duty on the administrators in relation to them. They could not prevent the lessees from paying the rent to the heirs of the lessor with the consent of his assigns. It follows that they cannot be surcharged with the amounts so paid, nor the sums paid by the heirs to the lessees for mining the ore.

The creditors’ third specification is destitute of merit. The administrators claimed a credit of $9,316.37 for loss on sale of personal property, but it was not allowed. They received a credit of $2,000, on the ground that the decedent’s interest in the stock of goods in the store of Merkel & Kaufman was appraised at that sum, when in fact the stock was exhausted in the payment of the firm debts. This was just, and it seems that it was so considered by the creditors, because they did not except to it in the court below, and they do not complain of it here. It has no connection with the claim for decrease on sale of personal property, and, as the administrators were not allowed any credit on account of such decrease, its amount is immaterial.

That the mortgage creditor had a right to demand and receive from the estate all the interest that was paid to him by the administrators is not denied. The personal estate was the primary fund for the payment of all the debts of the decedent, and it was the duty of the administrators to use it for that purpose. The lands covered by the mortgage were sold, under' an order of the Orphans’ Court, for $30,000 more than was required to satisfy the debt secured by it. It was well said by the learned judge of the Orphans’ Court, in disposing of this question, that “ the payment of the interest was a proper disbursement, not detrimental to the general creditors, and upon no theory can credit for it be refused.”

We are satisfied with the refusal of the Orphans’ Court to surcharge the administrators with interest on moneys received by them, with their disbursements for professional services, with the depreciation in the value of the real estate, and to impose on them the costs of the audit. The reasons for this refusal are clearly and forcibly stated in the auditor’s report, and in the opinion of the court below, and it is unnecessary to re-state or enlarge upqn them. All the specifications of error filed by the creditors in their appeal are overruled.

In the appeal by the administrators there are four specifications of error based on the denial of commissions, and of the claim for a credit for the loss on sale of personal property. It was the duty of the administrators to convert the personal property within a year after the letters were granted to them. If they had made a fair public sale of it within that period, their liability would have been measured by its proceeds. But they commenced their administration of the estate in the belief that it was solvent, and that the personal property would be taken by the family at the appraisal. They allowed this property to be used for two years in the prosecution of a business with which as administrators they had no lawful concern. In consequence of this use, .and a general decline in market values, it sold for $7,316.37 less than it was worth when it came into their possession. This loss must fall upon the administrators, because it resulted from their neglect of a plain duty.

• In passing on their claim to commissions, regard must be had to the conditions which environed them; to the depression in business and the depreciation in values caused by a financial panic which affected every industry; to the situation, extent, and character of the estate; to the complications which embarrassed, and the litigation which necessarily delayed, the administration of it. They have accounted for every dollar of the trust funds received by them; they have been surcharged with the loss on sale of personal property, and with all expenditures not sanctioned by the law; and they must lose the amount they have paid to creditors in excess of the dividend the estate will yield, although payment was made by them in the belief that the estate was solvent. When they entered upon the duties of their office they adopted a course which was recommended by competent counsel, and which was then approved by many, if not all, of the creditors, and by sagacious and conservative business men. While the outcome was unsatisfactory, it was mainly due to causes which they could neither foresee nor control. There is no trace of fraud or bad faith in their execution of the trust.

We are of opinion, upon due consideration of all the circumstances, that the learned judge of the court below erred in depriving the administrators of commissions on the trust funds. The cases relied on to sustain and vindicate this action are Swartswalter’s Acct., 4 W. 77; Stehman’s App., 5 Pa. 413; and Clauser’s Est., 84 Pa. 51. In each of these cases there was strong evidence of fraud and dishonesty, and commissions were rightly denied. They do not apply to and govern a case where the integrity of the accountants in all the trust transactions is conceded. The first and second specifications of error in the appeal of the administrators are dismissed, and the third and fourth are sustained.

As to the appeal of the creditors,

The decree of the court below is affirmed, and the appeal dismissed, at tbe costs of the appellants.

In the appeal of the administrators,

The decree is reversed, and the record remitted for further proceedings in accordance with this opinion, the costs of the appeal to be paid by the appellees.