Reed's Estate

82 Pa. 428 | Pa. | 1876

Judgment was entered in the Supreme Court, October 30th 1876,

Per Curiam. —

The right of these legatees to have their legacies is not denied, but the executors refuse immediate payment on the ground that the personal estate consists largely of bonds, mortgages, stocks and other securities, some of which are not due and others are not immediately convertible without loss. Charles M. Reed died and letters under his will were taken out in 1871, this petition was presented in 1873 and the report of the auditor filed in 1874. Sufficient time had elapsed therefore to give the executors an opportunity of converting the estate under ordinary circumstances. There are no known debts, and the legacies were not bequeathed upon a condition, of a contingency. The law authorizes distribution to be made after one year from the granting of the letters. There is no legal reason therefore, why distribution should not be made. The guardian in this case agrees and_ desires to take the legacies of his wards in the assets of the estate in kind, without waiting for collection and conversion by the executors. If this can be done in a reasonable manner so as to produce no loss to the estate and to others interested in it, we can see no good reason against its being done. The court below appointed an auditor to perform the work of fairly allotting the securities, and so far as we can discover, he has accomplished this in a reasonably fair manner. The objection made by the executors is that a guardian has no right to invest in such securities, and therefore has no right to demand them in specie. A guardian having the estate of his ward in possession, clearly cannot invest in such securities as those generally are, and if this were a case of investment the objection would be insuperable. But such is not the case. These securities were the investments of the testator himself, and many of them are in value far below their nominal sums, and the evidence tends to show that they have been in some, indeed in a large number of instances diminishing in value. The executors have held on to them, hoping to sell them at a better advantage. The guardian, however, fears still greater depreciation and prefers to endeavor to convert them, as he thinks he can do, to the advantage of his wards.

Under these circumstances we cannot say the court below erred in directing a transfer of the proportional share of each security to these legatees, so that their guardian may be enabled to realize their values to the best advantage. The executors are not harmed by this, but relieved from responsibility. On the guardian must rest the reponsibility after their receipt. He is liable to render a strict account to his wards for his management of their estate, and especially in a case such as this, where he has exercised his discretion in this manner. He takes upon himself the responsibility of collecting and converting the securities in the most prompt and available manner, to the best interest of his wards, and investing the proceeds according to law. Besides, in permitting him thus to take the assets into his own hands, he is subject to the control of the Orphans’ Court which may make such order for the. security of his wards as in their opinion may be just and reasonable. He may be. required to give further and other security. This is a matter that may be left in the hands of that court, and as this case must go back for correction in a part of the decree, the court may make proper orders to that effect if necessary.

r^There is one respect in which we think the court erred. It is in the respective portions of the estate to which the widow and children are entitled. The effect of the opinion of the Orphans’ Court on this point is to the deprive the widow of her proportion of that part of the residuary estate, which, by reason of a lapse, must be distributed under the intestate law. Whatever the residuary estate may be, great or small, the testator gave to his widow four-twelfths or one-third of this residue. This she became entitled to. by the will of the testator. The death of any one. or more of the- other residuary legatees did not lessen or deprive her of her proportion of the residue under the will, but simply changed the distribution of the part left .without an owner, by reason of the death of the legatee of it in the lifetime of the testator. This lapseddegacy (in this case two-twelfths of the residuary estate) became distributable under the intestate law, as part of the estate not disposed of by the will, when it took effect by and at the death of the testator. Of this he died intestate. His testacy was therefore of only a part of his estate. His widow was therefore put to no election between her legacy under the will and thig undisposed of estate. It was not the intent of the testator or of the law she should take her legacy in lieu of the estate thus lapsed. He thought of no lapse, and therefore .made no provision in lieu of the legacy. The lapse was from the act of God and the law of the land, which do injury to no one. If then the testator by reason of the lapse died intestate of this portion, —the intestate law must govern its distribution, and this being, so what warrant is there for saying .that the widow takes nothing under the intestate law ? She is therefore entitled to one-third, under the will, of the entire residuary estate, and as to that part of the residue which by the lapse is left., without an owner under the will," she is entitled^» one-third of it under the intestate law, and the children living at the testator’s death are entitled to the hther two-thirds in equal proportions. As this change in the decree of the court below will require the matter to go into the hands of the same or another auditor to carry out the decree of this court, and as the Orphans’ Court may think proper to make a further decree for the protection of the minor wards of the guardian, we shall reverse the decree generally, the costs to be paid out of the general estate, and the matter to be farther proceeded in according to the principles of this opinion.

And now, October 30th 1876, the decree of the Orphans’ Court is reversed and set aside, the costs to be paid out of the general estate of Charles M. Reed, deceased, and payment of the legacies of the wards of Henry Rawle, the guardian, to be apportioned and made under the directions of the Orphans’ Court in accordance with the principles stated in the foregoing opinion,' and a procedendo is awarded for this'purpose.