Adler v. Adler, 21067

• Decision Date: 09 February 1961
• Docket Number: No. 21067,21067
• Citation: 83 A.L.R.2d 1303,216 Ga. 553,118 S.E.2d 456
• Parties: , 83 A.L.R.2d 1303 Olga H. ADLER, Executrix, et al. v. Sam G. ADLER et al.
• Court: Georgia Supreme Court

Page 456

118 S.E.2d 456

216 Ga. 553, 83 A.L.R.2d 1303

Olga H. ADLER, Executrix, et al. v. Sam G. ADLER et al.

No. 21067.

Supreme Court of Georgia.

Feb. 9, 1961.

Syllabus by the Court.

1. Where, by the terms of a will creating a trust estate for named beneficiaries, the executor-trustees are empowered and directed to invest, reinvest, sell, lease, or transfer any of the property of the estate upon such terms as to them seem best, at public or private sale, without any order of any court and without reporting to any court, the power granted by the will, not having expressly included the right of the executor-trustees to encumber real property of the estate by a long-term option to purchase, will ordinarily not be enlarged to include such right.

2. No such estoppel was shown as could have the effect of enlarging the power of sale so as to include the power to grant an option.

Leopold Adler of Savannah, a man of considerable business acumen and wealth, died testate in that city in 1948. After disposing by his will of certain of his property by specific bequests, he devised the major portion of his estate to two named executor-trustees, his youngest daughter, Miss Olga H. Adler, and Savannah Bank & Trust Company, to be held in trust for designated beneficiaries, providing that at the end of ten years from the date of his death, one-half the corpus of the trust should be divided among the bencficiaries, and that, at the end of fifteen years from the date of his death, the remainder of the corpus of the trust should be distributed. Provision was made in his will that the two executor-trustees should operate and manage his business interests, the largest and most lucrative of which was the Leopold Adler Company. The entire capital stock of this company was owned by the testator and this business was operated in two adjoining and connecting buildings one of which the testator owned outright in fee simple, and upon the other of which, known as the Altmayer Building, he held a lease for a term extending until January 31, 1956, with a provision for a renewal for a period of six years. The executortrustees were empowered and directed to invest, reinvest, sell, lease, or transfer any of the property of the estate upon such terms as to them seemed best withour any order of any court and without reporting to any court.

Following the death of the testator, Miss Olga H. Adler was made president of Leopold Adler Company, and it was operated undre her guidance until the entire capital stock was sold to her brother, Sam G. Adler, and the two buildings which the company occupied were leased to him, on January 2, s952, by an agreement signed by both the executor-trustees.

The salient question in this case grows out of the grant by the executor-trustees of an option to purchase one of the buildings in which Leopold Adler Company carried on its business. The particular building involved in this litigation is the one owned by the Adler estate and known as the Weil Building. Under the lease mentioned above, this building was, on January 2, 1952, leased to Sam Adler for a period of ten years and six months at the rate of $1,250 per month, providing also that he should pay all State, county, and city taxes, pay fire and extended-coverage insurance premiums, insuring the building for $130,000, keep the premises in repair, and he was given an option to purchase the building at any time prior to six months before July 1, 1962, for $300,000, it being also provided in the lease that the option is assignable, and that, 'in the event of damage or destruction of improvements, this option may be exercised for the sum of $300,000 less any amount the executors may have received from insurance on said improvements in fixing and receipt of insurance by landlord [the executors].' In December 1957, at the request of Miss Olga H. Adler, the executors placed an additional $50,000 worth of insurance on the Weil Building and paid the premium therefor out of funds of the estate. On May 30, 1958, the Weil Building was destroyed by fire, and insurance proceeds in the amount of $180,000 were paid to the estate. On September 17, 1958, Sam G. Adler gave the executors notice of his exercise of the option and stated that he would tender $120,000 on September 25, 1958, in full satisfaction of the alleged option, thereby taking credit for the $50,000 worth of insurance for which he had not paid. On September 23, 1958, the executors filed a petition for declaratory judgment, seeking to determine two questions: (1) Could the executors under the provisions of Leopold Adler's will execute an option; and (2) was Sam G. Adler entitled under the provisions of the option to credit for the $50,000 worth of insurance on the Weil Building for which he did not pay the premium as he had for the $130,000 worth of insurance under the provisions of the lese. The trial court, without a jury answered the second question in the negative, and Sam G. Adler sued out a writ of error to the Court of Appeals, where that part of the case is still pending following a refusal by this court to permit that case to be transferred to this court and consolidated with the present case. See Case No. 21046, transferred to Court of Appeals on October 10, 1960.

As to the first question, whether the adler will permitted the executors to execute an option for the purchase of the Weil Building, the trial Court answered in the affirmative, and Miss Olga H. Adler, individually and as coexecutrix of the will, has sued out the present writ of error to this court.

Harry M. Hoffheimer, Robert S. Marx, Cincinnati, Ohio, Frank S. Cheatham, Jr., Savannah, Griffin B. Bell, Spalding, Sibley, Troutman, Meadow & Smith, Atlanta, for plaintiffs in error.

Connerat, Dunn, Hunter, Cubbedge & Houlihan, Edward T. Brennan, Hitch, Miller

& Beckman, Robert M. Hitch, Savannah, John E. Simpson, Atlanta, for defendants in error.

QUILLIAN, Justice.

1. By the terms of the will, the executor-trustees were empowered and directed to sell or to lease the realty devised to them for the trust estate at either public or private sale and upon such terms as to them seemed best. No reference whatsoever is made in the will as to any power being conferred upon them to grant an option to purchase the property. It has long been the rule, both in America and in England, until changed by statute in England (Law of Property Act, 15 Geo. V, c. 20 § 28, 1925), that 'the trustee who has a power to sell in addition to a power to lease, whether the latter is express or implied, does not ordinarily have the power to give the lessee an option of purchase for a definite sum during the term of the lease. The purpose of this rule is to compel the trustee to exercise his judgment at the time of the sale and not at the time of the making of the lease as to whether the sale is beneficial to the trust estate.' 4 Bogart On Trusts and Trustees, § 796; 21 Am.Jur. Executors and Administrators, 722, § 696; 2 Scott On Trusts, 1439, § 190.8; 7 Thompson On Real Property, 348, § 3892; 30 Co.Law Rev. 870; Clay v. Rufford, 5 De G. & Sm. 768, 780, 64 Eng.Rep. 1337, 1342 (1852); Oceanic Steam Navigation Co. v. Sutherberry, L.R. 16 Ch.Div. 236, 243 (1800); In re Armory Board, 29 Misc. 174, 60 N.Y. 882; Hickok v. Still, 168 Pa. 155, 31 A. 1100; Moore v. Trainer, 252 Pa. 367, 97 A. 462; Midland County v. Slaughter, 61 Tex.Civ.App. 328, 130 S.W. 612; Cozad v. Johnson, 171 N.C. 637, 643, 89 S.E. 37, 40; Swift v. Erwin, 104 Ark. 459, 148 S.W. 267, 269; Tibbs v. Zirkle, 55 W.Va. 49, 46 S.E. 701, 104 Am.St.Rep. 977; Trogden v. Williams, 144 N.C. 192, 194, 56 S.E. 865, 10 L.R.A.,N.S., 867; Hedgecock v. Tate, 168 N.C. 660, 85 S.E. 34.

In R. O. Campbell Coal Co. v. Baker, 142 Ga. 434(1), 83 S.E. 105, whith all the Justices concurring, it was held: 'In the absence of any authority for that purpose conferred by a will, the executor nominated therein and subsequently qualified has no authority to enter into a contract granting an option to a certain person to purchase at private sale land belonging to the estate for a specified price.' This case has been cited as authority in Walker v. General Ins. Co., 214 Ga. 758, 762, 107 S.E.2d 836; and in Fisher v. Pair, 69 Ga.App. 492, 497, 26 S.E.2d 187, in which latter case the following cases were also relied on: Neal v. Patten, 40 Ga. 363; Miller v. Hines, 145 Ga. 616(3), 89 S.E. 689; Turner v. Peacock, 153 Ga. 870(3), 113 S.E. 585; and Blumenthal v. Cain, 22 Ga.App. 596, 96 S.E. 710, in which these additional cases were relied on: Logan v. Gigley, 9 Ga....