Case Name: Stone's Appeals. [Neel's Estate.]
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1888-10-22
Citations: 1 Monag. 710
Docket Number: Appeals, Nos. 4 and 5
Parties: Stone’s Appeals. [Neel’s Estate.]
Judges: 
Reporter: Cases in the Supreme Court of Pennsylvania; being those cases not designated to be reported
Volume: 1
Pages: 710–718

Head Matter:
Stone’s Appeals. [Neel’s Estate.]
An auditor’s findings of facts, on exceptions to the account of a guardian, was to the effect that the guardian had been guilty of gross negligence in the management of the ward’s estate, among other things, in neglecting to enter a lien against, the real estate of a prior guardian for the amount shown by his account to be. due the ward. The auditor accordingly surcharged the accountant with tliis amount, refused to allow him commissions, and charged him with the costs of the audit. Pending proceedings before the auditor, the accountant was declared a lunatic for a time prior to the filing of his account. The court below dismissed exceptions to the auditor’s repoit. After an appeal was taken to the supreme court, the sureties of the prior guardian paid the amount due to the ward. Held, that, in the absence of manifest error, the findings of the auditor would not be disturbed.
Sterrett. J. — The jurisdiction of the supreme, court being appellate) the application for relief, in the nature of a credit on the decree, must be first made to the orphans’ court.
The mother of the ward, who had enter'ed into a contract with the guardian for the support of the ward, was offered as a witness, on the hearing before the auditor, the evidence being objected to but received. The guardian, by proceedings? in lunacy subsequently instituted in court, was found to be a lunatic for a period prior to the time of the hearing before the auditor. Held that the witness was not incompetent on the ground oí interest, or public policy or under the Act of June 8,1874.
Oct. 2, 1888.
Appeals, Nos. 4 and 5, Oct. T, 1888, by F. M. Stone, executor of Jolin A. Stone, deceased, to review a decree of O. C. Greene Co., confirming an auditor’s report on exceptions to the account of John A. Stone, guardian ot William Neel and Harvey Neel, at April T. 1884, Nos. 30 and 31. Green, J., absent.
The following facts were found by the auditor, A. A. Purman, Esq.:
Harvey Neel, Sr., died in 1859, intestate, leaving to survive him a widow, Nancy K. Neel, and two children,' William and Harvey, the former reaching his majority on Nov. 8, 1877, the latter on March 9, 1880. William Oliver was first appointed guardian, but died June 23, 1875. Dr. John A. Stone, the appellant, was appointed guardian Oct. 4, 1875, and filed his account in March, 1884. The account' of the administrator of William Oliver showed a balance due the minors of $l,456.89f, respectively, which the guardian had mingled with his own funds. This was not entered as a lien against Oliver’s real estate within five years after his death, and the real estate, although amply sufficient to pay this sum, was thus discharged, by lapse of time, from-its payment. Suit was afterward brought by Stone against the bondsmen of Oliver and judgment recovered for $2,913.79. A writ of error was taken to this judgment, which was still pending at the time of the hearing before the auditor. Dr. Stone, from time to time, furnished money to Nancy K. Neel, and to the wards, both before and after their majority, for their support and maintenance. On March 2, 1883, the wards, under an allegation of overpayment by Dr. Stone, assigned the judgment against the bondsmen of William Oliver, for the alleged purpose of reimbursing Stone the moneys so advanced. Stone claimed credit in his account, among other items, for $335 and $505, paid Mrs. Neel, but the auditor found that she did not receive such sums, and that the receipts for these sums, marked “ exhibit D, Nos. 5 and 6,” dated April 20,1880 and June 10, 1880, did not contain the genuine signatures of Mrs. Neel. The auditor accordingly surcharged the accountant with these sums. Dr. Stone, by proceedings in court, begun Oct. 24, 1885, was found to be a lunatic, Nov. 25, 1885, for the space of two years and a half prior to that date, without lucid intervals, and J. H. Henry was appointed his committee. The committee appeared before ■ the auditor and claimed a credit for a judgment of Williams & Rnppert against Nancy K. Neel, William Neel, and Harvey Neel, claimed to be paid by Stone and assigned to him Nov. i, 1882. This claim was objected to on the ground that no credit had been claimed therefor in the account. The auditor refused to allow the credit.
Nancy K. Neel was called as a witness March 17, 1885. She was objected to, on behalf of the accountant, on the ground that she was not competent to testify to matters that occurred prior to the appointment of Henry as committee of Stone, under the Act of June 8, 1874, she being a party in interest and having received a large part of the money in controversy from the accountant under contract with him for the support and education of the wards. On this question the auditor reported :
“As the record shows this contention to be between Hr. John A. Stone, guardian, and Harvey Neel, his ward, it is claimed, by the counsel for the exceptant, that Mrs. N. K. Neel is a competent witness for Harvey Neel, to testify against Dr. John A. Stone, guardian. The presumption of law is in favor of her competency. Barring v. Shippen, 2 Binney, 165. This presumption in favor of Mrs. Nancy K.-Neel’s competency the counsel for the accountant claims is rebutted by the interest which the said Nancy K. Neel has in the subject matter in controversy, in relation to which she is called to testify. It is claimed by the counsel for the accountant that she received the money and gave the receipts under and in pursuance of an agreement between ner, the accountant, and the ward, that she was to receive the money for his support and maintenance and to receipt for the same, and that this disqualifies her on the ground of interest. And the counsel for the accountant further claims that Mrs. Nancy 3L Neel is incompetent on the ground that to allow her to testify in behalf of the ward would be against the policy of the law. The counsel for the accountant also further claims, that Mrs. Nancy K. Neel is incompetent to testify on behalf of Harvey Neel, the ward, against the accountant, because the accountant was in fact a lunatic at the time she was offered, sworn and examined as a witness, having been found a lunatic during the pendency of this proceeding, and J. H. Henry having been appointed committee of his estate, and the same having been made a part of this proceeding. The counsel for the exceptant reply, that Mrs. Nancy K. Neel has no interest in the subject matter of the controversy in relation to which she is called to testify, and therefore competent as a witness so far as the objection of interest goes. And they further reply, that there is no policy of law, which renders her incompetent as a witness. And they also further reply, that the lunacy of the accountant does not render her incompetent to testify in behalf of the ward against said accountant, because the said accountant had not been found to be a lunatic, and a committee of his estate had not been appointed at the time she was offered, sworn and examined as a witness, nor for a considerable time thereafter. And they also further reply, that she is competent as a witness to testify in behalf of the ward against the accountant, notwithstanding her relation to the matters and things detailed by her, and notwithstanding all the objections made by the counsel for the accountant. Now, to take an illustration from nature, we can safely say, that we can always tell when it is day, and when it is night; but there is a region of twilight which we can neither call day or night, and when we are on the border land, between day and night, it is difficult to determine the exact point at which we cross the line. Now, using this illustration to make clear the contention between the learned counsel for the accountant and for the exceptant, we can safely say that we can easily understand that the accountant is the party on the one side, and that the ward is a party on the other side, but, when we are on the border land of the alleged arrangement between Dr. John A. Stone, the ward, and Mrs. Nancy K. Neel, it is not so easily determined whether the arrangement between the accountant, the ward, and Mrs. Nancy K. Neel creates such a contractual relation between her and the accountant as renders her incompetent on the ground of interest, or whether said relation is to be treated as strictly evidential only. Treating the relation between.the witness and the accountant as evidential only, or proof of a fact which would entitle her receipts to stand against the ward, is perhaps on the borderland between a contractual relation, and one strictly evidential only. Vet we are of opinion that the relation was not contractual but evidential only, such as to allow payments of money to her by the accountant, to stand as credits against the ward. The competency of Mrs. Nancy K. Neel as a witness in behalf of the ward has received the more careful and full consideration, because her evidence necessarily seriously affects the accountant. As we have not been permitted to hear from the lips of the accountant, by reason of his lunacy, his version of the matters in relation to which Mrs. Neel testifies, the auditor has felt it to be his duty to weigh this question in a most careful manner. And having given the question such consideration as we have just stated, and with a full sense of the consequences thereof, we have come to the conclusion that she is a competent witness in behalf of the ward. As we have concluded that the relation between the accountant and Mrs. Nancy K. Neel was not a contractual one but evidential, she is therefore not a ‘party or person’ interested in the proceedings rendered competent by the Act of April 15, 1869, and as such disqualified as a witness in behalf of the ward against the accountant, by the proviso to said Act which excludes parties or persons from testifying in actions by or against guardians. The Act of April 15, 1869, is an enlarging statute, it renders no person incompetent as a witness who was competent before it passed. Sheetz v. Hanbest’s Ex., 81 Pa. 100; Robinson v. Freeman, 13 W. N. C. 565; Packer v. Noble, 14 W. N. C. 145; Mulford v. Downer, 10 W. N. C. 446. And as Mrs. Nancy K. Neel was not qualified as a witness by the Act of April 15,1869, nor any of the other kindred acts upon the subject, she is not disqualified as a witness by the Act of June 8, 1874, by reason of the lunacy of the accountant. And as the law does not exclude her on the* ground of interest in the proceedings, or on the ground of the policy of the law, she is not excluded from testifying by the Act of June 8, 1874.”
The auditor further reported:
“ The eighth arid last exception of Harvey Neel to the account of his guardian, Dr. John A. Stone, asks that the said guardian should not be allowed anything for his services, because he has been an unfaithful guardian. Such an exception should never be-sustained unless the evidence clearly shows an intentional wrong on the part of the guardian to his ward. In this ease, the accountant has been found to be a lunatic for two years and a half prior to the 25th day of November, 1885, which ante-dates the filing of his account more than a year, by reason of which his papers and business were, during that period, in the custody of others than himself. Under this state of facts, he was not capable of giving proper instructions to his counsel as to the manner of stating his account, and as to what matters or papers did not properly belong to the said accounts. As we have already stated when passing upon the competency of Mrs. Nancy EL Neel as a witness, we have fully weighed the effect and consequences of her testimony upon the accountant, and we here now state the same again. The accountant, before his providential visitation which bereft him of his physical and mental powers, was a man of great learning and ability, with large business experience, and as such fully knew and understood the legal effect and consequences of his business transactions. The receipts, ‘ Exhibit D Nos. 5 and 6,’ reach back so far before the time at which the accountant’s lunacy began as to leave him responsible, in the absence of sufficient evidence to exculpate him personally for the intention which the law imputes to such acts. While it is true that the lips of the accountant are sealed by the visitation of God, and Mrs. Nancy EL Neel is alone left to tell her story, yet this will not alter the law upon the facts in this case. However reluctant we may be to find this accountant so far in default as to take away his allowance for his services, yet, under the well-settled law in cases such as this, we have nothing left for us to do but to sustain the eighth exception.”
Exceptions were filed on behalf of the accountant, alleging, inter alia, that the auditor erred, 1, in holding Nancy EL Neel a competent witness to testify to matters that occurred prior to the appointment of J. H. Henry as committee in lunacy of accountant [1] ; 2, in sustaining exceptant’s second exception whereby he surcharges accountant with the sum of $1,456.89 [2]; 4, in refusing to allow accountant credit for judgment of Williams & Eeppert [3]; 5, in sustaining except-ant’s fifth exception, whereby he refuses to allow accountant credit for the sums of $505 and $335, respectively; 6, in directing that the costs of audit be paid by accountant [4] ; 7, in refusing to allow accountant any compensation for services as guardian [5] ; 8, in finding as matter of fact that the accountant had been guilty of gross negligence in the management of the ward’s estate [6].
The exceptions were dismissed by the court, the reasons stated by the auditor being adopted by the court, in an opinion by Stowe, P. J., of 5th judicial district, specially presiding.
The accountant having died, his executors took these appeals.
The assignments of error, in No. 4, Oct. T. 1888, specified the action of the court, 1-6, refusing to sustain accountant’s exceptions, as indicated above by figures in brackets, quoting them; and, 7, in confirming the auditor’s report.
The assignments of err or,to. No. 5, Oct. T. 1888, specified the same action of the court, and, 4, the action of the court in refusing to sustain accountant’s fifth exception, quoting it.
The judgment against the sureties of Oliver was affirmed in Neel v. Com., 5 Cent. 483; and it is stated in appellant’s paper-book that this has since been paid by the sureties to the wards.
F. P. Iams, with him Barb & Donley, for appellants:
The object of the enactment of the supplement of June 8, 1874, was to remedy the cases of inequality arising in actions by or against the estates of lunatics by reason or the vantage ground occupied by the remaining party or parties to all transactions occurring between such party or parties and the lunatic prior to his lunacy ; and the supplement should receive such liberal construction as will cure the evils intended to he provided against by it. See Miller’s Competency of Witnesses, 153; Karns v. Tanner, 66 Pa. 304; Ash v. Guie, 97 Pa. 493.
Mrs. Neel is incompetent to testify, upon grounds of public policy. Neely’s Est., 4 Pa. 649; Fross' Ap., 105 Pa. 265; Adams v. Bleakley, 20 W. N. C. 305; Graves v. Griffin, 19 Pa. 176.
Mrs. Neel was also incompetent from interest. Under the contract to support the children, she had duties to perform.
If it be made out to a reasonable certainty that a debt has been lost by the neglect of a guardian, he is responsible; but not otherwise. Pim v. Downing, 11 S. & R. 66; Konigmacher v. Kimmel, 1 P. & W. 207; 1 Rhone’s O. O. Pr. page 338; Johnson’s Ap., 12 S. & R. 317.
In the absence of fraud or unfairness, an administrator is entitled to reasonable commissions for his services, although he may have been negligent in the performance of them. Fross's Ap., 105 Pa. 259.
Had Dr. Stone been in full possession of his mental faculties, at the time of the filing of his account and prior thereto, then the auditor and the court below might possibly have been justified, under the other facts in this case, in finding that he had been guilty of negligence in the management of his ward’s estate.
In Seguin’s Ap., 103 Pa. 139, the guardian employed the funds of the ward in his own business, and was deprived of commissions on that account, but it was held that the allowance of the costs of the audit, and a moderate counsel fee for the accountant, out of the funds, was not error.
J. M. Garrison, with him Wyly, Buchanan & Walton, for appellees.
The decision of an auditor as to facts will not be reversed, unless in case of palpable and clear mistake. Loomis’ Ap., 22 Pa. 312.
It is not tbe fact of lunacy, but it is tbe judicial finding of that fact and. the appointment of a committee in pursuance thereof, that brings a case within the operation of the Act of June 8, 1874.
"Where a witness has been fully examined on a trial, the subsequent death of the opposite party, althongh it may render the witness himself incompetent, does not make his testimony so taken incompetent. Hay’s Ap., 91 Pa. 265; Wolfinger v. Forsman, 6 Pa. 294. Why should a decree of the court declaring Stone to be a lunatic have a greater effect in this particular than his death ? It is no answer to say that in the latter case the party might secure himself by causing his testimony to be taken, while in the other case his luancy would prevent him securing himself in that way. The testimony of a surviving party, regularly taken during the lifetime of the deceased party, could not be excluded by showing that the condition of the deceased party, was such, throughout the pendency of the case, as to preclude the taking of his testimony.
The finding of the inquest was not conclusive; it was oniy prima facie evidence of the fact found, and any one interested was at liberty to show the contrary.
As to the test of the interest of a witness, see Greenl. on Ev. § 390; Hartman v. Ins. Co., 21 Pa. 476.
Mrs. Neel has been paid all she was entitled to under her contract. She therefore had no interest in this controversy.
The objection to the testimony of Mrs. Neel was not confined to particular parts of her testimony but was general. Now if she was competent as to any of the matters to which she testified although not as to others, the accountant cannot avail himself of the objection even to such parts of her testimony as were not competent. Zuver v. Clark, 104 Pa. 222.
The first duty of a trustee, after his appointment and qualification to act, is to secure possession of the trust property and to protect it from loss and injury. 1 Perry on Trusts, § 438.
Courts of equity uniformly hold that parties, who have failed to assert their rights within the statutory period, are guilty of “gross laches,” and are therefore not entitled to the aid of the court, and they do so hold not because the cases are within the statute, but in analogy to the statute. Neely’s Ap., 85 Pa. 387; Ashhurst’s Ap., 60 Pa. 290; Evans’s Ap., 81 Pa. 278.
A guardian “ is utterly inexcusable if he suffers a large debt to remain unsecured year after year, when it might be put beyond the reach of accidents by an hour’s attention.” Black, O. J., in Wills’s Ap., 122 Pa. 330.
A trustee in making investments, can protect himself from risk only by investing the trust fund in real or government securities, or by making the investment in pursuance of an order of court. Hemphill’s Ap., 18 Pa. 303
The orphans’ court had no jurisdiction as to the Williams-& Keppert judgment. Ake and Feay’s Ap., 74 Pa. 116; Willard’s Ap., 65 Pa. 265.
After a ward comes of age, the fiduciary relation of guardian ceases; they stand as debtor and creditor. Bull v. Towson, 4 W. & S. 557; Crowells Ap., 2 Watts, 295; Portuondo’s Est., 10 W. N. C. 174.
Oct. 22, 1888,

Opinion:
Sterrett, J.,
in No. 4, Oct. T. 1888.- — -The general rule of practice that an auditor's findings of fact, approved by the court below, will not be disturbed in this court, except for manifest error, is too firmly settled to admit of any doubt.
In this case, the learned auditor's findings and conclusions of fact are clearly within the rule. So far as they have any bearing on the questions presented for our consideration, they were not only approved by the orphans' court, but they appear to have been warranted by the evidence, and are, therefore, entitled to the same weight and conclusiveness as the verdict of a jury. It follows that, under any proper application of the rule, the second, third and sixth specifications of error cannot be sustained. The surchange complained of in the second, and the refusal to allow accountant credit for the judgment in favor of. Williams & Beppert, to use, etc., v. Nancy K. Neel et al., which is the subject of complaint in the third, as well as the finding that accountant was guilty of gross negligence in the management of his ward's estate, complained of in the sixth, were all in accordance with the weight of the evidence. Indeed, it is difficult to see how the auditor, in view of the testimony before him, could have reached any other conclusion than he did in regard to either of the questions involved in these specifications.
The first and only remaining specification of error is in holding that Mrs. Nancy K. Neel "was a competent witness to testify to matters that occurred prior to the appointment of J. H. Henry, as committee in lunacy of accountant." Mrs. Neel is the mother of accountant's wards, but she is not a party to the proceedings, nor does it appear that she had any disqualifying interest in any of the questions before the auditor. " The true test of such interest is that the witness will either gain or lose by the direct legal operation of the judgment or decree, as the case may be, or that the record will be evidence for or against him in some other action.. It must be a present, certain, and vested interest, and not an interest uncertain, remote or contingent." Greenl. Ev. sec. 390. The burden of proof is on the party who objects to the competency of a witness; and if the fact on which the objection rests be doubtful, the witness should be permitted to testify. Hartman v. Insurance Company, 21 Pa. 476.
Moreover, the witness objected to in this case was clearly competent when she was called, examined, and cross-examined. That was all done before accountant was found a lunatic, and even before the commission in lunacy was issued. Nothing that transpired thereafter required the auditor to strike out her testimony. Hay's Appeal, 91 Pa. 265. Nor was the witness incompetent under the provision of the Act of June 8, 1874, or on any other ground.
It is alleged tbat since this appeal was taken, the sum with which accountant was surcharged has been collected from the bail of the former guardian. The record, of course, discloses nothing of the kind ; but, assuming the fact to be as alleged, it is no ground for either reversal or modification of the decree. It is our duty to review the action of the orphans' court upon the facts of which its decree is predicated, and not upon what transpired subsequently to the decree. If the money has since been collected from the party primarily liable, or from 1ns surety, that fact may be brought to the attention of the court below, and, after hearing the parties interested, that court will determine what, if any, relief appellant is entitled to. Our jurisdiction in the premises is necessarily appellate, and hence the applicatiou for relief, in the nature of a credit on the decree, must be first made to the orphans' court.
Decree affirmed, and appeal dismissed at the cost of appellant.
Sberrett, J., Oct. 22,1888, in No. 5, Oct. T. 1888. — The subject of complaint in the fourth specification of errors is the refusal of the auditor and court below to allow accountant credit for $505 and $335, alleged to have been paid by him to his wards as per receipts, dated respectively April 2, and June 10, 1880.
The genuineness of these vouchers, offered in support of the payments, was denied, and upon the evidence before him the learned auditor came to the conclusion that the proof was insufficient to warrant him in finding the fact of payment. The evidence, upon which he acted in reaching that conclusion, was neither incompetent nor irrelevant, nor does it appear that he erred in not finding that the payments were made as claimed.
The remaining specifications are the same as in No. 4, of this term, which was heard with this appeal from same decree. The questions, common to both cases, as well as the facts and circumstances out of which they arise, are substantially the same. It is, therefore, unnecessary to repeat what has been said in the opinion just filed in that case. For reasons there given, the specifications referred to are not sustained.
Decree affirmed, and appeal dismissed at the cost of appellant.