Collins v. Hartford Accident & Indem. Co

• Decision Date: 24 November 1941
• Citation: 178 Va. 501,17 S.E.2d 413
• Court: Virginia Supreme Court
• Parties: COLLINS et al. v. HARTFORD ACCIDENT & INDEMNITY CO. et al.

178 Va. 501

17 S.E.2d 413

COLLINS et al.

v.HARTFORD ACCIDENT & INDEMNITY CO. et al.

Supreme Court of Appeals of Virginia.

Nov. 24, 1941.

Appeal from Circuit Court of City of Norfolk; Allan R. Hanckel, Judge.

Suit by Cadwallader J. Collins, administrator d.b.n.c.t.a. of the estate of W. Thompson Barron, deceased, and another, against the Hartford Accident & Indemnity Company and others, to recover for the estate the personal property of which testator died seized and which allegedly was wasted by the administratrix c.t.a. with the aid of other defendants. From a decree dismissing the bill, plaintiffs appeal.

Affirmed.

Argued before CAMPBELL, C. J., and HOLT, HUDGINS, GREGORY, BROWNING, EGGLESTON, and SPRATLEY, J J.

James E. Heath and William G. Maupin, both of Norfolk, for appellants.

Rixey & Rixey and Mann & Tyler, all of Norfolk, for appellees.

SPRATLEY, Justice.

W. Thompson Barron, of the city of Norfolk, died in April, 1924, testate, leaving surviving him his widow, Charlotte A. Barron and two sons, Richard S. and W. Thompson. His will, written wholly in his handwriting, was probated on May 26, 1924. On that date the widow qualified as administratrix, c. t. a., giving bond in the penalty of $60,000 with the Hartford Accident and Indemnity Company as surety.

The will, after directing the payment of testator's debts and making certain other incidental provisions, with which we are not here concerned, disposed of his property in the following language:

"My property of all kinds, personal and real, I leave absolutely to my wife, Charlotte A. Barron during her life, and the income from the same to her during her life, and at her death I want it to revert to my sons, equally. In case of her marrying again, then she is to have the income from same during her life, but the property of whatever kind is to become the property of my sons equally--and she can allow them whatever amount of income from the property she may care to give them. In case of the death of the boys during her life, then all the property is to be hers in fee simple and she can dispose of same as she may deem best.

"In case the boys do not desire to become professional men, or in case they can not have a college education, I would like them to learn a trade so as to enable them always to be able to make their own living."

Charlotte A. Barron, administratrix, c. t. a., promptly paid the funeral expenses, debts and cost of administration, and carried out the incidental provisions of the will. Her final fiduciary account was filed in the office of the clerk of the Circuit Court of the city of Norfolk, on May 22,

1925, and was duly confirmed by that court in accordance with chapter 221, § 5401 et seq., of the Code of Virginia, 1936 (Michie), on June 23, 1925. The account showed that as administratrix, she turned over to herself, as life tenant, the entire corpus of the personal estate amounting to $56,272.74, with the exception of commissions due the administratrix of $3,462.27.

After taking possession, as life tenant, of the estate of her late husband, she undertook to operate a large portion of the businesses formerly conducted by him. Subsequently the entire personal estate suffered great losses and depreciation.

In 1939, fourteen years after the confirmation of her final report, Cadwallader J. Collins, administrator, d. b. n. c. t. a. of the estate of W. Thompson Barron, deceased, and W. Thompson Barron, the son of the testator, as complainants, brought this suit against the Hartford Accident and Indemnity Company, the Seaboard Citizens National Bank of Norfolk, National Bank of Commerce of Norfolk, the Southern Bank of Norfolk, Charlotte A. Barron and Richard S. Barron. No relief is claimed here against the National Bank of Commerce of Norfolk and the Southern Bank of Norfolk.

The object of the suit was to recover for the estate the personal property of which the testator died seized and possessed, and which was alleged to have been wasted by the administratrix, c. t. a., and the life tenant thereof with the aid and assistance of the defendant banks in making to her personal loans secured by stock known to be held by her for life only. It prayed an accounting by the administratrix, c. t. a., a refunding from the banks, and satisfaction from the surety of any deficit in the estate.

The evidence was taken by depositions. The able, learned, and experienced chancellor, after consideration of the evidence and the argument of counsel, held that the testator intended to turn over to his widow his entire property for her life to manage it for herself and her two sons as she thought best; and that since she managed it to the best of her ability, she was not liable for the loss suffered; and consequently that the co-defendants were not liable. The bill was dismissed as to all of the defendants.

The appellants concede in their brief that the decision in this case hinges upon the answer to the question, --whether Mrs. Barron, in her capacity of administratrix, c. t. a., had the right to deliver to herself, as life tenant, the corpus of the personal estate without requiring of herself a refunding bond with surety for its forthcoming upon the falling in of the life estate.

The testator was a man well past middle-age, married to a woman twenty-five years his junior. At the date of the will, January 7, 1916, one of their sons was about four years of age and the other about five. They became of age, respectively, in 1932 and 1933.

At the time of his death, he owned real estate, consisting of a residence and warehouse property, inventoried at $62,000. He owned and was operating three businesses. He conducted, in his own name, a printing and bookbinding business and managed and controlled two corporations, engaged in paper making, the Seaboard Paper Box Corporation and the Paper Stock Corpora-tion, owning all of their capital stock. He had holdings of federal and municipal bonds in the sum of $2,000 capital stock in Norfolk banks aggregating nearly $36,000. The total value of his personalty, including $9,000 in accounts receivable, was appraised at $69,000.

Barron's wife had considerable knowledge of his business affairs. He talked them over with her frequently and conferred with her in all of his moves. The record shows that he thought she was intelligently interested, and that he appeared to have full confidence in her business ability and judgment.

For some years prior to the death of the testator, the printing and bookbinding business had been operated at a loss, but the operation of the two corporations had been profitable and furnished the chief source of income for their owner. Before the settlement of her fiduciary account, Mrs. Barron, as administratrix, sold the printing and bookbinding business, which she also was unable to operate profitably, for $10,000 and used the money for the payment of the testator's debts. She also tried to sell the Seaboard Paper Box and Paper Stock businesses but was unable to do so. She thought it necessary, therefore, to operate those two businesses in the effort to get income to support herself and her two sons and to pay for their education. Their operation proved profitable under her supervision until about 1930. At that time the great economic and financial depression which began in 1929, was showing its devastating effects upon both businesses and upon all other financial and business concerns.

The business of the Paper Stock Corporation became so poor, when other concerns to which it sold its products closed, that she abandoned its operation and concentrated her efforts upon the operation of the Paper Box Corporation.

Mr. Barron had been a member of the board of directors of the Seaboard bank. Mrs. Barron consulted the officers of that bank and informed them of the condition of the business and the need to secure money to continue its existence.

In the widow's conduct of the business, she borrowed from the Seaboard Citizens National Bank, on April 28, 1930, the sum of $5,000, on her personal note, giving to the bank certain collateral owned by her and, in addition, three shares of the Bank of Commerce stock originally issued as five shares in the name of her husband. The entire proceeds of this loan were deposited to the credit of the Seaboard Paper Box Company and were used in that business.

In October, 1930, and in February, 1931, the Seaboard Paper Box Company got two loans from the Seaboard Citizens National Bank evidenced by its own notes for $5,000 each. These notes were endorsed by the widow personally. She also deposited with the bank one hundred and twenty shares of Seaboard Bank stock and fourteen shares of Citizens Bank of Norfolk stock which had originally stood in the name of her husband but had been transferred, at various times subsequent to 1925, by that bank, at her request, to Charlotte A. Barron individually. This stock was eventually transferred to the Seaboard Citizens National Bank, as pledgee, in order that it might receive the dividends thereon.

Various smaller loans amounting to $2,000 were made to the Seaboard Paper Box Company, bringing the aggregate sum of its borrowings from the bank to a total of $12,000 in the year 1932. The proceeds of all these loans were likewise deposited to the credit of the Seaboard Paper Box Company, the operating company of the estate, and were used for the benefit of the estate.

The Seaboard Paper Box Company continued to operate. Mrs. Barron stated that without the benefit of the loans, the business could not have been carried on. It was operated until late in the fall of the year 1933. She said that not one penny of the borrowed money was applied to her personal use.

The loans have not been paid and the bank claims a right to hold the pledged stock.

It is uncontradicted that in administering the estate, in turning over the property to the life tenant to manage and conduct, and in all of her moves in carrying on the business, Mrs. Barron acted upon the...