Burke v. Canfield, 7607.

• Decision Date: 28 April 1941
• Docket Number: No. 7607.,7607.
• Citation: 121 F.2d 877,74 App. DC 6
• Parties: BURKE v. CANFIELD et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

74 App. DC 6, 121 F.2d 877 (1941)

BURKE v. CANFIELD et al.

No. 7607.

United States Court of Appeals for the District of Columbia.

Decided April 28, 1941.

George E. Sullivan, of Washington, D. C., for appellant.

Lawrence Koenigsberger, of Washington, D. C., for appellee Canfield.

Richard E. Wellford, of Washington, D. C., for appellee Wellford, as guardian ad litem.

William J. Neale, of Washington, D. C., for appellee Taltavull.

Before GRONER, Chief Justice, and MILLER and RUTLEDGE, Associate Justices.

RUTLEDGE, Associate Justice.

The District Court revoked letters of administration issued to appellant Burke and ordered that certain costs be assessed against him personally. The appeal has been taken to review these actions. The principal question concerns accountability for the value of the good will of a funeral business owned and operated by the decedent, Ellen Taltavull, at the time of her death in 1935. It is claimed that the administrator permitted this to be appropriated by another without authority of court and without compensation. The business was originally owned and conducted by Warren Taltavull in his lifetime under the name "W. Warren Taltavull Funeral Home." Its location was on premises owned jointly by his wife, the decedent whose estate is involved here, and her sister Mrs. Grahe. Taltavull's family, including five minor children, resided in the upper portion of the building. Upon his death Mrs. Taltavull continued to operate the business much as it had been conducted before, but with the assistance of Francis Collins, who was employed as funeral director by her. Upon her death title to the premises vested by survivorship in Mrs. Grahe. She, her brother Burke, who is appellant here, Collins, and Sullivan, an attorney, agreed that the business should be continued by Mrs. Grahe, at least until it could be determined whether the estate could carry it on. Sometime later Mrs. Grahe and Collins agreed that he should act as manager and receive fifty per cent of the net profits for doing so. Mrs. Grahe moved into the premises and assumed custody and care of her deceased sister's children.

Burke was appointed and qualified as administrator. In October, 1935, he filed an inventory, listing among other things stock and fixtures of the funeral business and automobiles used in it, though no mention was made of the good will. In December Burke sought authority from the court to sell the listed assets. The Register of Wills refused to recommend approval of the proposed order and filed a memorandum setting forth that the business should be sold as a whole, including the good will. The administrator's petition for sale was withdrawn. In July, 1937, another petition was filed seeking authority to sell the listed articles, but stating that the administrator had not felt justified in asking for authority to continue the business since that would involve probable losses to the estate. To support this the petition recited figures showing income of the business prior to Mrs. Taltavull's death, but they did not take account of the rental value of the premises or the value of her services. The administrator claimed that these, if considered, would indicate a probable loss. The petition also stated that he and Mrs. Grahe had agreed on the sale of the listed items, apparently to her, and that a portion of the purchase price would be paid as rent until the court should authorize the sale.

The Register of Wills also refused to approve this petition. His memorandum stated that an accounting of the estate was past due, that its assets appeared to have been used by Mrs. Grahe without any authority of court, and that no provision had been made for the good will. He recommended that a guardian ad litem be appointed to represent the interests of the five minor heirs. The guardian ad litem, upon appointment, filed a petition asking that Burke be removed as administrator and some impartial person be appointed in his stead who might take action against Mrs. Grahe and others who had intermeddled with the estate. The petition set out the facts concerning the agreement to continue operating the business after the decedent's death and charged that no provision had been made to preserve the value of its good will. It was charged that the statements of the net income in Burke's petition for sale were false and known by him to be so, that the true income was greatly in excess of his figures, and that he knew when he filed the petition that Mrs. Grahe had conducted the business at a profit of more than $21,000 between May, 1935, and December, 1936. It was charged also that the accounting was false for failure to include any income from the business, that all these things had caused great loss to the estate, and that by his actions the administrator had allowed Mrs. Grahe to intermeddle in the assets of the estate to its injury.

Appellant's response to the rule to show cause set forth that Mrs. Grahe became the owner in fee simple of the business premises at the decedent's death; that the nature of the business made its success dependent upon its location; that in this case zoning restrictions made it impossible to obtain a new location in that region; that appellant had relied upon the advice of counsel in making the agreement with Mrs. Grahe; that soon after his appointment and qualification he had investigated completely the possibility of continuing the business at a profit to the estate and concluded that it could not be done; and that counsel had advised him the showing would not warrant asking the court for authority to continue it. The answer also denied knowledge of the profit made by Mrs. Grahe, and the charges of intermeddling. The court directed an audit of the business and the auditor's report showed profits of about $41,000 realized from the time of the decedent's death. Exceptions were taken that the auditor had failed to consider the rental value of the premises and the services of Mrs. Grahe and Collins.

After hearing, the court found that there was a good will of the business which had a value and was an asset of the estate, that Mrs. Grahe and Collins had intermeddled and therefore each became an executor de son tort, that Burke had aided and abetted them in doing so, that he knew or should have known that the business was being operated at a profit, and that by failing to report the profits in his accounting he aided in concealing the intermeddling and the profits realized from it. Burke was removed as administrator and Canfield, appellee here, was appointed administrator de bonis non. Thereafter costs were assessed against Burke personally.

During the later course of the proceedings Mrs. Grahe notified the administrator to remove the estate's property from the premises. She also discontinued use of the name "Taltavull Funeral Home," removing the sign bearing it from the premises and notifying the administrator of these facts. Thereafter a petition was filed seeking permission to file an additional petition for new trial, reciting these facts and alleging that the administrator de bonis non had made no attempt to sell the name or the good will. The petition was denied, as was the original one, and the objections to the assessment of costs, after it was modified in part, were overruled.

Numerous errors are assigned, but may be resolved into three issues which are sufficient to dispose of the case. The principal question is whether there was a good will of the business which was an asset of the estate and had value sufficient to make it the subject of intermeddling. The others relate to whether the court had power under the statutes and facts to remove the administrator and the effect to be given to the court's failure to separate its findings of fact and conclusions of law, as required by Rule 52(a), Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c.

Before discussing the issues, it may be noted that the entire course of conduct which is in question, including the course of administration, up to the time of Burke's removal was very much of a family affair. Burke, Mrs. Taltavull and Mrs. Grahe were brother and sisters, the minor heirs were nieces and nephews of Burke and Mrs. Grahe, and Collins was employee or partner of both the decedent and Mrs. Grahe. They acted in harmony, such as would be fit families in dealing with such matters more frequently than, unfortunately, occurs. They were careful also to act with the advice of counsel, and the record shows, we think, that all acted in accordance with what they considered the best interests of the minor children, who were the real beneficiaries of the estate. Mrs. Grahe particularly showed her solicitude for their welfare, by taking the places of their parents, commendably assuming a responsibility which many in her position would have avoided. That she has discharged it with success and affection is shown by the fact that one of the children, Peter A. Taltavull, on attaining his majority, has appeared independently and urged that what she has done is not only lawful but evidence of her affectionate interest in them. Mrs. Grahe has testified that she has not used any of the proceeds of the business for her own or her husband's benefit, but has expended all of it on the children and on the home she has maintained for them, except that she got "something to eat out of it." There is no reason to disbelieve this statement. The case therefore is one not colored by any element of intentional fraud or misconduct. If there has been intermeddling it has been innocent, due to ignorance concerning legal rights and powers rather than to design to do wrong. But innocence of motive cannot entirely absolve one who oversteps the boundaries prescribed by the law for dealing with a decedent's estate, and if that has occurred here the responsibility for it must be accepted by those who have crossed the line, however unintentionally.

I.

The principal...