198 Pa. 600 | Pa. | 1901
Opinion by
Joseph E. Schell died October 6, 1889. He was the owner of thirty-four shares of the capital stock of the Fire Association of Philadelphia, which stood in his name on the books of the association at the time of his death. By his will he bequeathed to liis executors in trust, one-eighth part of his residuary estate for the benefit of each of his four daughters, and he directed that the respective shares of two of his daughters should include -eight shares of the capital stock of the Fire Association, and the respective shares of the other two daughters should include
In May, 1894, the executors filed their account, which was audited by the orphans’ court, and an adjudication was filed October 27, 1894, by which the stock of the Fire Association was awarded to the executors as trustees under the provisions of the will. Subsequently, in 1899, Sibbs defaulted and disappeared, and the facts of the loan and hypothecation of the stock
The learned counsel for the appellant frankly concede that one of several executors may transfer personal property of the decedent for value by way of sale or pledge, and that the transferee will take a good title thereto, unless he has knowledge, actual or constructive, of facts which put him on inquiry, as to whether the transaction is one made in course of the administration of the estate and for its benefit. As suggested, therefore, the single question here is, whether Mrs. Barton had either actual or constructive notice of facts which should have put her on inquiry, which would have resulted in a knowledge of the fraudulent conduct of Sibbs.
• The very proper admission by counsel, which is fully justified by all the authorities, together with the uncontrovertible •facts, make.the question for determination here, a very narrow one. The facts as conceded by all parties, show conclusively that Mrs. Barton had no actual knowledge of any intended fraud on the part of Sibbs at any time during the entire transaction. She acted in the utmost good faith, and loaned the money to him in his representative capacity, on his allegation to her, in her language, “that he wanted money as executor of the Schell estate, and it would be an accommodation to him if I had it; if I couldn’t give it, he would apply to someone else.” This was less than two years after the death of the testator and while the estate was in course of administration. The good
It is contended, however, by the appellant that, while the transfer of the stock made by one executor only and by way of pledge and not sale was not sufficient in itself to put the transferee on inquiry, yet it was a fact that should have made her cautious, and made it more incumbent on her to be alert and heedful of other circumstances in the case. But, under the circumstances of this case, we do not see that these facts should arouse in Mrs. Barton even a suspicion of any intention of Sibbs to misappropriate the loan. She was not dealing with a stranger, but with a man whose business standing with her and in the community for many years, had taught her to rely implicitly on his word. She was fully authorized to rest upon that in determining the verity of his assertion that he needed the funds for the use of the estate. Nor does the fact that he made the transfer of the stock as sole executor authorize the inference of bad faith. It is conceded that Sibbs was the active executor and that Mrs. Barton did not know that-he had a co-executor. It cannot be seriously contended that under these circumstances, Sibbs could not have sold the stock and passed a good title. If that be true, he, as sole executor, could pledge it, and invest the pledgee with a complete title. The authority to pledge the personal property of the decedent for the purpose of raising money or securing debts rests on the same principle, is governed by the same rules and is subject to the same limitations as apply to sales : 11 Am. & Eng. Ency. of Law (2d ed.), 1031. The facts in the case of Ellis’s Appeal, 8 W. N. C. 538, relied upon by the appellant, show that it does not support his
The fact that the property was specifically bequeathed to the executors as trustees, as claimed by the appellant, does not impose upon the purchaser or pledgee any greater duty to inquire into the necessity of the sale or pledge than if it were merely an asset of the estate not so bequeathed. As suggested by the learned judge of the court below, such specific bequests would necessarily be subject to the necessity of a sale for the payment of debts, and in such case the purchaser or pledgee need not inquire into the necessity of the sale or pledge.
It is further contended on the part of the appellant that Mrs. Barton acquired no title to the stock as against the estate until the delivery of the note and accompanying papers to her husband in the latter part of 1894 or in the early part of 1895. We think this position ignores the facts in the case. The loan was made in 1891, and at that time and in consideration thereof, Sibbs promised an equivalent amount of Fire Association stock as collateral, and then and there showed to Mrs. Barton the stock which was to be held as collateral. This was in Sibbs’s office which had been the office of Mrs. Barton’s former husband, Joshua H. Morris, and in which all her papers were kept in a box, in charge of Sibbs. As she demanded the security before she made the loan, and in response thereto he showed her the stock, it is fair to presume, under the circumstances stated, that, during the time which elapsed between the date of the loan and the delivery of the securities to Dr. Barton, they were in Mrs. Barton’s box which was in the control of Sibbs as her representative. While this would not be sufficient to transfer the title to the stock, yet it is a fact worthy of consideration in determining the equities of the case and the intention of both parties as to the delivery of the securities. The loan
The view we take of the case renders it unnecessary to consider the effect on Mrs. Barton’s title to the stock of the proceedings in the orphans’ court on the account filed by the executors.
It follows that the court below was right in bolding that Mrs. Barton was entitled to retain the six shares of stock until she was paid the amount of the loan made by her to Samuel S. Sibbs as executor of the estate of Joseph E. Schell, deceased.
The assignments of error are overruled and the decree is affirmed.