Darling v. Birney

• Citation: 297 F. 1011
• Decision Date: 07 April 1924
• Docket Number: 3930.
• Parties: DARLING et al. v. BIRNEY et al.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

297 F. 1011

DARLING et al. v. BIRNEY et al.

No. 3930.

United States Court of Appeals, District of Columbia.

April 7, 1924

Submitted October 10, 1923.

Appeal from the Supreme Court of the District of Columbia.

H. S Barger, of Washington, D.C., and Isador Shapiro, of Richmond Va., for appellants.

H Prescott Gatley, Joseph T. Sherier, and J. Holdsworth Gordon all of Washington, D.C., for appellees.

Before SMYTH, Chief Justice, ROBB, Associate Justice, and SMITH, Judge of the United States Court of Customs Appeals.

SMITH Acting Associate Justice.

This is an appeal from a decree dismissing a bill, praying that an accounting be had to ascertain the moneys and property received by Arthur A. Birney, as executor of the will of Gay Beatrice Spranger, deceased, and the amount which should have been paid by him as directed by said will, and further praying that a decree be entered against the defendants in favor of the plaintiffs for the sum of $36,076.67, and for other relief.

The record discloses that on April 11, 1869, one Joshua Pierce died, leaving a will in which he devised his entire estate to John B. Blake and Moses Kelly, trustees, to invest and reinvest said estate, and to pay the net income thereof to his nephew, Joshua Pierce Klingle, for life, with remainder over to Klingle's surviving children. Joshua Pierce Klingle died on the 4th of July, 1892, leaving surviving him his wife, Georgianna M. Klingle, and his daughter, Gay Beatrice Klingle, who, in February, 1894, married Edwin I. Darling. Edwin I. Darling, who was the father of the plaintiffs, died on the 13th of February, 1894, and his widow, the mother of the plaintiffs, married F. X. Spranger on the 6th of March, 1895. Mrs. Spranger died on the 20th of June, 1895, leaving surviving her as her sole heirs at law her two children Charles T. Darling and Nancy Darling, the plaintiffs in this case. Charles T. Darling was born on the 11th of June, 1889, and Miss Darling on the 8th of December, 1887.

Joshua P. Klingle at the time of his death left certain real estate, known as Linnaean Hill, which was valued at from $100,000 to $160,000, and was devised by him to his wife, Georgianna M. Klingle. At the time of the death of Joshua P. Klingle his property was subject to a deed of trust to secure the payment of a note for $89,495.20, executed to the trustees of the estate of Joshua Pierce. The deed of trust and note arose out of certain business transactions had by Klingle with the trustees, and became a part of the estate of Gay Beatrice Spranger on her death. The last will of Gay Beatrice Spranger devised and bequeathed all her property to the Washington Loan & Trust Company, in trust to make certain payments therein specified, and to convey the residue of the estate to her children when all of them had reached the age of 25 years. The will named Arthur A. Birney and Osceola Green as executors thereof. Arthur A. Birney qualified as sole executor on the death of Osceola Green, and said note and deed of trust came into his hands as such executor.

It appears that Klingle purchased the Linnaean Hill property from the trustees of the Pierce estate, and in consideration of the transfer conveyed to the trustees certain real estate owned by him, and gave to them his note for $41,000, which was secured by a deed of trust on the property sold to him by the trustees. Klingle borrowed from the trustees the sum of $20,000, of which $10,000 was secured by a deed of trust on Linnaean Hill and $10,000 by a chattel trust on personal property owned by Klingle. In addition to the indebtedness of $61,000 so secured, Klingle incurred a further indebtedness to the trustees of $23,559.20 for moneys advanced to him, or paid for him by the trustees, for which sum Klingle gave to the trustees his unsecured notes. On March 1, 1889, Klingle and the trustees had an accounting, and the total indebtedness of Klingle was stated in an original memorandum to be as follows: Note dated November 1, 1869 . . . $ 41,000.00

Interest on said note from November 1, 1869, to March 1, 1889 . . . 47,560.00

Note dated February 1, 1873 . . . 10,000.00

Interest on said note from February 1, 1873 . . . 9,650.00

Note dated November 30, 1870 . . . 5,000.00

Interest on said note from November 30, 1870, to March 1, 1889 . . . 5,475.00

Note dated May 8, 1878 . . . 5,000,00

Interest on said note from May 8, 1878 . . . 3,250.00

Advances and payments made by the trustees on Klingle's unsecured notes . . .11,076.77

8,266.77

370.30

3,845.36

Grand total . . . $150,494.20

For the interest due on the notes, unsecured advances to Klingle and advances and payments made for him by the trustees he executed to the trustees his said promissory note for $89,494.20, secured by a deed of trust to the Linnaean Hill property. On Klingle's total indebtedness of $150,494.20 he paid to the trustees $73,943.78, which liquidated the notes, amounting to $61,000, and part of the interest thereon. leaving unpaid $76,550.42. On the death of Klingle the trusteeship of the estate was wound up and the trustees thereof turned over to Gay Beatrice Spranger said notes executed to them by her father.

For nearly three years Mrs. Spranger, by herself and her attorney, Arthur A. Birney, endeavored to collect the balance of $76,550.42, apparently due on the note for $89,494.20. Mrs. Klingle and her counsel, the late J. J. Darlington, at first insisted that there was due only the sum of $26,170.89, with interest from July 4, 1892, the date of Klingle's death, and that among the amounts wrongfully included in the note for $89,494.20, or not credited, was $65,935, interest which it was claimed represented income of the Pierce estate, and therefore belonged to Joshua P. Klingle under the terms of Pierce's will.

On June 1, 1894, nearly two years after the death of Klingle, Mr. Birney wrote a letter to Mrs. Spranger, then Mrs. Darling, calling her attention to the memorandum of settlement made by her father with the trustees, on which memorandum the claims of Mrs. Klingle and her counsel were largely based. While insisting that the note was not much, if any, out of the way, Mr. Birney conceded the effect of the figures on the paper submitted to him, and admitted that it disclosed that interest on Klingle's notes to the trustees was made a part of his indebtedness. Mrs. Spranger, then Mrs. Darling, replied that she thought Mr. Birney's idea was the best that could be done under the circumstances and expressed the hope that he would be able to carry it out.

The negotiations continued, and after further examination of figures and accounts Mr. Birney, as attorney for Mrs. Spranger, and Mr. Darlington, as attorney for Mrs. Klingle, agreed in January, 1895, that the sum of $49,315.42, with interest thereon from the date of Klingle's death, should be accepted in full settlement of the note. Mr. Darlington said he would advise his client to pay that amount. On January 10, 1895, by letter Mr. Birney submitted to Mrs. Spranger the settlement agreed upon with Mr. Darlington, and took pains to say that he thought it was fair to her father and one which in his lifetime she would have approved. On the 31st of January, Mr. Birney wrote to Mr. Darlington that he had received from Mrs. Spranger authority to accept the settlement proposed. Mrs. Klingle, however, declined to accept the offer and Mr. Darlington withdrew from the case.

After the death of Mrs. Spranger, and late in 1895, the matter was taken up with Henry Wise Garnett, then the attorney for Mrs. Klingle. Mr. Garnett informed Mr. Birney that he was authorized to settle for the sum proposed by Mr. Birney, but that he understood that interest was to be paid two years from the 1st of April, 1896. Mr. Birney corrected Mr. Garnett's understanding as to the interest and the negotiations came to an end.

As a result of the deadlock it was finally agreed to submit the matter to the court for decision. Accordingly in February, 1896, Mrs. Klingle filed a bill in equity against the executor of Mrs. Spranger's will, in which she set out that, in the account of Klingle with the trustees, Klingle should be charged with $61,000 borrowed by him on his secured notes from the trustees, and with the sum of $23,559.20 advanced or paid for Klingle, and with the sum of $76,500, the amount received by Klingle under order of court in equity cause No. 2219. She also alleged that, while she believed that the income of the Pierce estate largely exceeded $4,000 per year from 1877 to 1883, and from 1876 to 1890, she was willing to limit the credits to the following sums: $4,022.97 paid by Klingle to the trustees on the 20th of June, 1890; $69,920.81 paid by him on the 20th of May, 1891; $1,800 per year income from the 17th of December, 1870, to the 1st of April, 1890, except for the period from the 1st of September, 1877, to the 1st of February, 1883, during which period he should be credited with the sum of $4,000 per annum.

To that bill in equity the executor made answer, in which he admitted that the trustees were by order of court on June 27, 1871 required to pay to Klingle the sum of $4,000 per annum out of rents and income of the trust estate, but averred that, inasmuch as Gay Beatrice Spranger was not a party to that proceeding, the order in so far as she was concerned was wholly void and inoperative. It was further averred in the answer that the executor verily believed that the income from the estate of Pierce was for many years less than $4,000 per annum, and that, notwithstanding the fact that the order directing the payment to Klingle of $4,000 per annum had been vacated, the trustees continued to pay at that rate. The answer admitted that...