Estate of Whitman

• Decision Date: 12 March 1900
• Docket Number: 210
• Citation: 45 A. 673,195 Pa. 144
• Parties: Estate of Edward G. Whitman, Deceased. Appeal of Mary Estelle Powell
• Court: Pennsylvania Supreme Court

45 A. 673

195 Pa. 144

Estate of Edward G. Whitman, Deceased. Appeal of Mary Estelle Powell

No. 210

Supreme Court of Pennsylvania

March 12, 1900

Argued January 10, 1900

Appeal, No. 210, Jan. T., 1899, by Mary Estella Powell, from decree of O.C. Phila. Co., dismissing exceptions to adjudication. Affirmed.

Exceptions to adjudication.

The facts appear by the adjudication of PENROSE, J., which was as follows:

The decedent, a widely known manufacturer of high grade confectionery, doing business for many years at 812 Chestnut street, died December 6, 1892, leaving a widow, Susanna Whitman, and three children, Edward G. Whitman, Jr., Mary E Powell and Ann E. Whitman.

By his will, proved December 15, 1892, he directed the payment of his debts and funeral expenses "as soon as convenient after" his death, and after a specific gift of all his household goods and furniture to his wife, gave the residue of his estate, real and personal, one third to his wife and two thirds, in equal shares, to his said children, providing however, as to his business as follows:

"I order and direct that in case my son, Edward G. Whitman, Jr. shall be living at the time of my decease, that my confectionery business, in which I am now engaged, with the stock, capital and property thereof, the whole of which is my absolute property, shall be managed and conducted by my executors or the survivors of them for the period of two years from the time of my decease, and I order and direct that in such case the entire stock, capital and property (exclusive of the good-will of the same) shall be appraised and the value thereof determined as soon as convenient after my decease by three disinterested persons familiar with the nature thereof, one of whom shall be chosen by my said son, one other of them shall be chosen by my said wife and daughters or their legal representatives, and the two persons thus chosen shall choose the third person for the purposes aforesaid, and from the profits thereof I order and direct that my estate shall receive for the purpose of distribution interest at the rate of six per cent. per annum on such appraised and determined value thereof, and that the residue of the said profits shall be distributed as follows, to wit: Twenty per centum thereof annually to my said wife, Susanna Whitman, ten per centum thereof annually unto my said daughters, Mary Estelle Powell and Ann Elizabeth Whitman, respectively, and the remaining sixty per centum thereof annually to my said son, Edward G. Whitman, Jr., during the said period of two years; and I order and direct that the stock, capital and property of my said business shall be maintained by my said executors during the said period of two years in the same relative condition as to value as the same shall be at the time of my decease, and at the expiration of said period of two years I order and direct that my said son, Edward G. Whitman, Jr., shall have the right and privilege of taking or purchasing my said business, including the stock, capital and property thereof, at the appraised and determined price or valuation made thereof as aforesaid, the good-will thereof to be included for the said price in case the said business shall be taken or purchased by him, and that the proceeds thereof shall be considered as part of my estate and shall be divided between my said wife and children in the manner and proportions set forth in the second item of this will. And in case my said son shall die within the said period of two years or before the purchase of my said business shall be fully perfected by him, or in case he shall decline to join with the other executors in the management of the same during said period as above set forth, then and in such case I order and direct that my said business, including the stock, capital, property and good-will thereof, shall be coverted according to law, and that the proceeds thereof shall be considered as part of my estate and shall be divided between my said wife and children in the manner and proportions above set forth.

"And for the payment of my debts and the distribution of my estate, I order and direct that my executors . . . shall sell and dispose of all my real estate wherever situate at public or private sale as they may deem most expedient with full authority to execute . . . deeds of conveyance to the purchaser or purchasers thereof . . . the proceeds of all such sales to be used and applied according to the uses, ends, intents and purposes set forth and declared in this my last will and testament.

"And lastly, I nominate, constitute, and appoint my said wife, Susanna Whitman, my said son, Edward G. Whitman, Jr., and my said daughter, Ann Elizabeth Whitman, the executors of this my last will and testament."

The entire estate of the testator consisted of his household furniture, etc., appraised at $7,520.70, specifically bequeathed to his wife; three vacant lots in West Philadelphia, directed to be sold as above, and the stock, fixtures, book accounts, etc., of his business, appraised at $26,746.49, viz: stock at store, $5,583.67; machinery and fixtures, $14,201.62; book debts, considered good, $3,882.39; book debts, considered doubtful, $463.60, and cash on hand January 1, 1893, $2,615.21 (the good-will, by the express provisions of the will, not being appraised, though it was to go to the son in the event of his becoming the purchaser at the appraised value of the stock and fixtures).

Letters testamentary were granted to Mrs. Whitman, Miss Whitman and Edward G. Whitman, Jr., and the appraisement fixing values as above, though stating items with much detail, was taken in the manner directed by the will. Mrs. Powell, it is true, who, with her husband, Samuel W. Powell, was living, as the auditing judge infers from letters which were in evidence, in Media, was not asked to unite with her mother and sister in the selection of one of the appraisers, but she stated that she would have selected the one whom they named, and expressed her satisfaction with the inventory and appraisement by joining with the other parties in interest, including her brother, in a written approval.

The son had been manager or foreman of the business for many years before the death of the decedent, receiving a salary of $20.00 per week. He was, of course, familiar with the manner in which it was conducted. Owing, perhaps, to increased competition, it had ceased to be as profitable as it once was, and Mrs. Powell and her husband were apprehensive that its continuance might result in disaster. This was also the opinion of Arthur M. Burton, Esq., acting as their counsel, though in a friendly rather than on a professional basis, and it was suggested that it would be better to create a joint stock company, with an allotment of stock to the parties according to their respective interests. Mrs. Powell's interest, however, was but two ninths, and the others, viz: her mother, sisters and brother, thought they had no right to disregard the wishes of the testator. It was, therefore, continued without interruption, the son acting as manager, and the mother, from time to time, advancing such moneys as were required to pay debts, replenish stock, etc., and for the year succeeding the death of the testator interest at the rate of six per cent was paid upon the appraised value of the business, in accordance with the direction of the will, and duly distributed, Mrs. Powell asking for and receiving her share. But it became evident as time passed that the business was not earning profits, that it was falling behindhand, but it was hoped that the trouble would be but temporary and that if it could be outlived there might be a return of prosperity. Business creditors, however, were becoming clamorous, and finally, after obtaining extensions from time to time, it became necessary, in order to save from the wreck some of the moneys she had advanced for the purposes of the estate, to issue executions on the judgments held by Mrs. Whitman, and what was left of the stock and fixtures was sold by the sheriff at public sale conducted by M. Thomas & Sons, realizing but a small fraction of the debt, and leaving unpaid altogether debts contracted in the course of carrying on the business after the decedent's death to the amount of several thousand dollars.

Mr. Lyle, on behalf of Mrs. Powell, contended that the accountants were not protected by the provision of the will with regard to continuing the business; that under any circumstances, there was no right to borrow money or to use any part of the estate outside of the business for the purpose; that the management was reckless and without proper accounts; and that Edward G. Whitman, Jr., or if he alone were not responsible, all the accountants should be now charged with the stock and machinery at the appraised value and the value of the real estate sold; and, after crediting only payments of debts existing at the death of the testator, funeral expenses and expenses of administration, that two ninths of the balance should be awarded to her.

The estate of a decedent at the moment of his death becomes assets for the payment of his creditors, and no provision in his will can impair their rights. As against them, therefore his executors would be liable for loss arising from carrying on his business, except for the purpose of winding it up, no matter how explicitly this should be directed by the will. But as against legatees a very different principle applies. They are mere volunteers, having such rights only as the testator chooses to give them. He is dealing with his own and may do with it as he pleases. Those who accept the benefits of his will cannot repudiate any of its provisions. It is true that executors carrying on a business under the directions of a...