Court Opinion

ID: 6233705
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:27:42.063207+00
Date Added: 2024-06-11T08:57:58.042561
License: Public Domain

The opinion of the court was delivered, January 3d 1870, by
Thompson, 0. J. —
The term “partial” account in the Orphans’ Court implies, ipso facto, that nothing is settled by it but those matters constituting the items in question in the statement itself. That was what was meant in Rhoads’ Appeal, 3 Wright 186; — ■ the case stands for that and no more.
It seems to us, therefore, that the auditor and court below administered the rule of that case erroneously in its application to this, and without giving the requisite consideration to the nature of the partial account filed by the executors of the will of George Leslie, deceased. It is true, they charge themselves with the appraised value and excess in the sale of the goods of the decedent, and also with the rights and credits due, described as cash on hand, bonds, notes and other evidences of debt, amounting to $3746.38, and they set forth their disbursements. Items of charge and discharge to the extent stated, had been administered and settled, and the account confirmed. But being a partial account expressly, and so intended by the executors, it did not operate in any way on items of charge or discharge not included in it, and it concluded only those that were. Subsequently, in their final account, the executors claimed credits not claimed in the partial account. These had mostly arisen when the test of collecting the debts, due the estate was applied. In some cases, receipts of the testator were in the hands of debtors, without being endorsed on the evidences of the debts due in the executor’s hands; and in others the debts proved entirely uncollectable. These were items of discharge against the charge of the debts to the executors in the inventory, which were not known, stated or passed upon in the partial account. It was insisted, however, that as the executors had charged themselves with the inventory of the debts due, in their partial account, that precludes any credit in their final account for partial payments of those debts, or of those which have turned out desperate. This is not correct, according to the principle of Rhoads’ Appeal. The charge of the debts due the estate did not preclude* credits. Those claimed now were not passed upon then, and of course, the case cited did not bar them. Had the credits been claimed and *364allowed, although erroneously, they would have stood, unless relieved by a bill of review.
To prevent a result like that claimed, the executors took the precaution in their partial account, by way of recapitulation, to define exactly what they charged themselves with, in dollars and cents, and the credits they claimed for disbursements. These disbursements were cash disbursements, not credits for receipts against claims, or for desperate debts, and thus far, therefore, that account is conclusive. The items excepted to and disallowed as credits by the auditor and court, not being in the partial account, were not determined by it, and should not have been excluded, on the principle of the case cited, and Shindel’s Appeal, 7 P. F. Smith 43, but should have been allowed as credits in the final account, if otherwise entitled on their merits. The items thus referred to are in the sixth exception to the executors’ account. Those views do not apply to the alleged mistake in the Clark voucher. It was passed upon in the partial account, and if it was passed upon as for a less sum than it ought, it can only be reformed or corrected on a bill of review.
We are, for these reasons, of opinion that the confirmation of the auditor’s report, so far as the personal estate is concerned, must be set aside to enable the court to send the account back to the auditor, so that the subject of the exception mentioned may be considered and reported upon.
The next two exceptions, being the first and second in their order, to the decree of the Orphans’ Court, raise the question whether the accounts of the executors in relation to the management and sale of the real estate of the decedent were before the Orphans’ Court in such a form as to authorize that court to proceed to investigate and decree upon them, and to surcharge them with a supposed loss on the real estate by their negligence or mismanagement in the sale of it. It was a large surcharge, equal to the one-third of the price at which it was sold.
An objection to the action of the court was that the statement made by the executors in.answer to the citation, was that it blends the trust account of the executors, arising out of their trust of the realty, with the personal estate. But that seems not to be accurate. It is true that the statement of the executors showing the sale of the real estate, and the amount received therefrom, and the balance due, was made on a citation requiring it to be filed in the register’s office at the same time they were cited to file a final account of the personalty. The executors filed their account of the realty there. This was but an irregularity, which ought not to vitiate what was done in regard to it in the Orphans’ Court after it was certified there by the register. This court had undoubted jurisdiction of this account, as appears by the 19th section of the Act of 16th of June 1836, Art. YIII. But the statement was not *365blended with the executors’ account of the personalty. It is a separate statement, and although irregularly brought into the Orphans’ Court, it was not objected to in limine for that reason, but proceedings were suffered to go on to a large extent and to a final decree upon it. The court having jurisdiction of the subject-matter, and its exercise being acquiesed in by those interested, it is too late now to object to matters of form in the proceedings.
The statement in regard to the sale of the realty being separate from that of the executors’ final account of their administration of the personalty, filed at the same time, is an answer to the objection founded on Aston’s Estate, 5 Wh. 228. It is true that in what the executors call their statement in regard to the sale of the realty, and which the court treated as an account, no charge for commissions and expenses appears. Why they were not claimed does not appear, hut this was the neglect of the executors, and the decree of the court cannot be set aside for that reason. We think the statement or account of the sale, was well and substantially before the court, and it was not error to refer it to an .auditor on exceptions filed. This dismisses the exception as to form.
There is another exception, which is- the second that remains to be noticed. It is claimed in this that the executors were acting in regard to the real estate as trustees, and not as executors, and that the proceeds of the realty was no part of their administration account, and that the court erred in referring the statement made by them to an auditor, and afterwards in surcharging them with the sum of $4861.87, in accordance with the auditor’s-report.
Being testamentary trustees, as the executors were, brought them within the jurisdiction of the Orphans’ Court, as already said, beyond a question. At the very most, the Common Pleas might, in such a case, have concurrent jurisdiction, if jurisdiction at all. We do not mean to enter the field of discussion as to this; suffice it, that the 19th section of the Act of June 16th 1836, gives jurisdiction to the Orphans’ Court in a testamentary trust like this: 4 W. & S. 433; 1 Harris 79; 1 Wh. 104. Considering the executors’ statement brought into the Orphans’ Court by citation, although irregularly, but only so, it was not error to refer it to an auditor. Here without exception as to form, the battle was. fought on the question of whether the executors had done their full duty in selling that portion of the real eastate returned as sold to Margaret Leslie, at the sum of $12,000, payable in instalments, without interest.
The testimony is not before us on which the auditor adjudged the executors surchargeable, and we can go no farther than to see whether the principles upon which he proceeded were accurate or not. He finds as a fact, from calculation based on the sale of the Vance farm, that the amount of land included in the land sold to *366Margaret Leslie, was 229 acres 3 rods and 12 perches; that the executors had a bid of $75 per acre from Edward McMillan immediately after the death of the widow of the decedent. This bid was made before, in fact, the land was advertised for sale, and it was neither withdrawn nor renewed afterwards, when the land was by advertisement notoriously for sale; but the auditor finds that the executors always represented that they had a bid of $75 per acre by persons looking at the property with a view to buy ; and that, notwithstanding, they sold it to Margaret Leslie in January 1866, for about $53.38 per acre. The executors insisted that they had sold to her only 195 acres. Had this been so, it would not have equalled the bid made by half the amount of the surcharge. But then the auditor finds that the executors sold to her in fact 224 acres, and properly enough concluded that they are not exonerated from responsibility if they acted so negligently as to sell largely more than they intended. Without discussing this more in extenso, the auditor finds, what must be a finality to this controversy in the absence of anything to show an error in it— viz., that “ the fair market value of the land in 1865, after the death of the widow, when the executors advertised it and offered it for sale, was $75 per acre. This was its market value from the death of the widow till the time it was sold. The market value has decreased somewhat now.” “ These,” he adds in another paragraph, “appear to be the facts of the case.”
All this might have been true, and still there might have been an excuse for the executors not selling, but it does not appear in the auditor’s report, and we have no testimony before us to enable us to review him on the fact.
The auditor also found that McMillan’s bid should have been regarded by the executors; that it was not necessary that he should have repeated it, especially as the executors treated it as a standing bid by declaring that they had a bid at that price for the land; — and furthermore, that McMillan was of sufficient ability to make good his bid, as much so as Margaret Leslie was to make good her’s. The auditor winds up his report as follows: — “ Viewing this transaction in this light, I am of opinion that it shows such negligence, such default on the part of these executors, acting as they were, in the capacity of trustees, as brings the case within the rule stated by Rogers, J., in Moore’s Appeal, 10 Barr 438, that a trustee may be surcharged beyond the actual profits where there is satisfactory proof of supine negligence or wilful default; and therefore surcharge the executors with the difference between the price they did receive, $12,000, and the price I find from the evidence they might and should have received, $16,861.87J, which difference is $4861.87J.” This is a finding of supine negligence on part of the executors in the sale of the property in question, whereby the cestuy que trustents would be greatly damaged unless *367they are surcharged. The rule to surcharge in such cases to the extent of the injury is not to be doubted: Moore’s Appeal, supra; Springer’s Estate, 1 P. F. Smith 342.
The able argument of the counsel for the appellants might cause a doubt of the accuracy of the auditor’s finding; but he put us in possession of nothing by which it could on the facts be tested, and set aside, if wrong. We are, therefore, constrained to affirm the decree of the court in so far as it relates to the account of the executors in the management and sale of the real estate; but we reverse, as already stated, the decree confirming the executors’ account of the personal estate, with costs to be paid by the appellees. As to the account confirmed, the costs are to be paid by appellants.
We think that the court should open the decree thus declined to be affirmed, in order to allow the executors to present any claim they may have for disbursements and expenses incident to the sale of the real estate, and accruing thereon. This would be equitable and just, and is recommended to the court.
It seems there was an issue ordered and tried to inform the conscience of the court as to some of the controverted matters, perhaps before the auditor. It is probable that its result may have confirmed some of the findings of the auditor. This we do not know, however, but that issue is not before us in any shape or form. The decree of the court seems to have been based upon the auditor’s report alone, and so was the argument here. We have nothing to do with the feigned issue, as no part of it is before us.
Let the entries be made as indicated above in this case.