Court Opinion

ID: 3865379
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:59:06.440243+00
Date Added: 2024-06-11T13:31:16.540854
License: Public Domain

I am unable to agree with the final conclusion reached in the foregoing opinion or with the grounds upon which it is based.
In that opinion it is stated that the appellant's case "appears to be clearly ruled by Horton v. Maine,22 R.I. 126." But to my mind that case, on its facts, is clearly distinguishable from the instant one. There Maine, while he was mortgagee of a stock of goods belonging to Horton, had been appointed guardian of the person and estate of the latter,against the latter's opposition and on the ground that the latter was incompetent to manage his own affairs. Soon afterwards Maine had, in the exercise of the power of sale in the mortgage, sold the goods; and he had also, at the sale, bought them through a third person for his own personal benefit.
In the instant case, however, John M. Dean had not only made to the trust company a pledge, with a power of sale, of the shares of corporate stock involved in the accounting in this case, to secure the payment of such indebtedness as he might owe to the trust company; but he had also, in the will *Page 510 
which took effect after his death, named that company to be the executor and the trustee thereunder and had therein given it as such executor very broad powers, including the power, "in its discretion, to sell, mortgage and pledge such and so much of my estate, real or personal, as it may deem necessary. . . ."
Moreover, the trust company, in making the sales of shares of corporate stock that are involved in this accounting, did not buy them in, directly or through a third person, but sold them to outsiders; and there is no evidence to indicate, nor is it contended by any party in this case, that these shares were not sold for the highest price obtainable and for at least as much as the market price. Indeed, the trial justice, in his rescript, found that the stock of one of the two corporations had been sold "at the market" and that the trust company had "used all reasonable care and diligence in the sale" of the other stock and that the price obtained was fair and reasonable.
It was shown by undisputed evidence at the trial of this case in the superior court that, at the times when these sales were made by the trust company as pledgee, there was held by it an unpaid and long overdue promissory note which had been made by John M. Dean to the trust company and as security for the payment of which it held the above-mentioned shares of stock, pledged by him to it; that, at the times of these sales, there was payable to the trust company on that note a sum which considerably exceeded the total amount received by the trust company from these sales; and that this amount was credited by it on this note.
By reason of the facts of this case I am convinced that it differs radically from Horton v. Maine, supra, and that the rule of law therein laid down and applied should not be applied in this case. On the contrary, I am convinced that on the question of the right and power of the trust company to make these sales and to apply the proceeds from them in part payment of the note held by it, the same reasoning should *Page 511 
be applied and the same results reached as are set forth in the opinion in Purman's Estate, 334 Pa. St. 238.
In that case the Union Trust Company, at the death of Purman, the testator, was the holder and owner of a judgment note made and delivered to it by his son-in-law; and as collateral security for the payment thereof it held, under a pledge by the testator, two negotiable bonds owned by him. In accordance with his will, it was appointed as the executor thereof and it duly qualified and acted as such. Its first and final account was contested by his widow.
The trust company, while it was executor, had as pledgee sold the above-mentioned bonds in accordance with the pledge, the note being in default; and it applied the proceeds of their sale to the payment of the note. In its account as executor it charged itself with the amount received at the sale and credited itself with the same amount, as having been paid upon the obligation secured by the testator's pledge.
The court overruled the widow's contentions against the allowance of the account and at page 245, after stating the conduct of the trust company in selling the bonds and accounting as executor for the amount received, said: "Being in possession of the pledged bonds, the Trust Company exercised its right to sell them and apply the proceeds to the obligation they secured. . . . Hence the pledgee was entitled to satisfy its claim by foreclosing on the pledged bonds and the executor properly credited itself for this amount."
In the instant case I see nothing invalid, improper or inconsistent in the conduct of the Industrial Trust Company with regard to the sale of the securities and the application of the proceeds and in continuing to serve as executor of the will. In view of the fact that it proved in this case the validity of the note and the sum payable to it thereon, I cannot see that the fact that it had not proved, by the statutory method, the validity and amount of its general claim against the estate should prevent it from having its account as executor allowed and its resignation as executor accepted.
Nor do I find anything improper in its method of treating, *Page 512 
in its account as executor, the sums received from the sales of the pledged securities, which seems to me the same method as was employed by the executor and approved by the court in Purman'sEstate, supra.
I see no objection to the conduct of the trust company in including in its inventory as executor the pledged shares of stock as a part of the estate. The legal title to them was in the testator at the time of his death and they stood in his name on the books of the respective corporations. The certificates therefor were in the possession of the trust company at that time and continued to be in its possession after his death and when the shares were inventoried and appraised; and I cannot see what difference it could make, in the matter of the inventory and appraisal, whether the certificates were in one department or another of the single corporation.
It seems clear to me that since the trust company, as pledgee, sold one of the blocks of shares for an amount greater than its appraisal value, it, as executor, properly included in its account, as assets received, the difference between the two amounts. It also seems clear to me that the executor properly received the dividends paid on one of the blocks of shares, since those shares formed a part of the estate, the legal title being in the testator at his death.
Granting that the burden was on the trust company to prove, by convincing evidence, that, as to the matter of the pledged securities and the proceeds of their sale, it had not used for its personal benefit its office or any of its powers as executor, or done anything as a creditor-pledgee which it was not clearly authorized and entitled to do, I find that it has made such proof and that there was no evidence to the contrary.
Since there was no objection to the allowance of the account except on the ground of the way in which the executor dealt with these securities and the proceeds of the sales thereof, and as there was no reason given by the trial justice or the appellees for denying the petition of the executor for *Page 513 
leave to resign except that its account was not approved, I am of the opinion that the appellant's exceptions should be sustained.