Goldsborough v. de Witt, 50.

• Decision Date: 15 January 1936
• Docket Number: No. 50.,50.
• Citation: 182 A. 324
• Parties: GOLDSBOROUGH et al. v. DE WITT et al.
• Court: Maryland Court of Appeals

182 A. 324

GOLDSBOROUGH et al.

v. DE WITT et al.^*

No. 50.

Court of Appeals of Maryland.

Jan. 15, 1936.

Appeal from Orphans' Court, Talbot County; F. T. Lowe, T. J. Slaughter, and T. M. Jenkins, Judges.

Proceedings in the matter of the estate of Charles Shirley Goldsborough, deceased, wherein Edward De Witt and another, executors under the last will and testament of Charles Shirley Goldsborough, deceased, filed an accounting, to which Eleanor Cook Goldsborough, widow of Charles Shirley Goldsborough, deceased, and others filed exceptions and a petition for plenary proceedings and the transmission of issues to the court of law for trial by jury. From an order denying their petition for plenary proceedings and the transmission of issues, Eleanor Cook Goldsborough, widow of Charles Shirley Goldsborough, deceased, and others appeal.

Order affirmed.

Argued before BOND, C. J., and URNER, OFFUTT, PARKE, SLOAN, MITCHELL, and JOHNSON, JJ.

Isaac Lobe Straus, of Baltimore, and Harrison Tilghman, of New York City (Madison Brown, of Centreville, on the brief), for appellants.

William H. Adkins, of Easton, and Vernon Cook, of Baltimore (Daniel M. Henry, of Easton, on the brief), for appellees.

JOHNSON, Judge.

This is an appeal from an order of the orphans' court of Talbot county, passed on June 19, 1935, refusing to grant appellants' petition for plenary proceedings and the transmission of issues to a court of law for trial by a jury.

Charles Shirley Goldsborough died June 23, 1930, leaving a last will and testament, in which Edward De Witt and Stephen J. McGarrigle, of New York City, were named as executors. This will was promptly admitted to probate and the executors duly qualified. By the terms of the will the bulk of his estate was left in trust to the Bank of New York & Trust Company with directions to pay, in certain proportions, the income therefrom to his widow, Eleanor Cook Goldsborough, his two sisters, his brother, and a sister-in-law, with certain cross-remainders among them and their descendents. The widow, the brother, sisters, and sister-in-law are appellants herein. On November 12, following his demise, the widow filed her renunciation and thereby elected to take, in lieu of the provision made for her in her husband's will, her legal share of his entire estate. The personal estate at that time was inventoried and valued as follows: Stocks in excess of $550,000 in the hands of testator's New York brokers, in whose favor a lien existed thereon for $228,000; cash in banks of about $13,000; a dairy farm in Talbot county, $35,000; a herd of dairy cattle on the above farm with livestock, machinery, and equipment used in its operation, approximately $9,000.

For a better understanding of the questions raised by the appeal, items 1, 6, 7, and 11 are quoted from the will as follows :

"First: I order and direct my executors hereinafter named to pay all my just debts and funeral expenses as soon as practicable after my decease. * * *"

"Sixth: I hereby authorize and empower my executors hereinafter named and the survivors or survivor of them or such of them as shall qualify and undertake the execution of this my will in their discretion to sell and dispose of the whole or any part of my real estate not hereinbefore specifically devised at such time or times and in such manner either at public auction or by private sale and for such price and upon such terms as they shall deem proper and to execute and deliver good and sufficient deeds of conveyance therefor to the purchaser or purchasers thereof and until the sale thereof to let and lease the same for such time and upon such terms and conditions and for such rent as my said executors shall deem advisable. * * *"

"Seventh: I hereby authorize and empower my executors and trustees or such of them as shall qualify and undertake the execution of this my will to retain and set apart any stocks, bonds, mortgages or other securities or investments which I may hold at the time of my decease for the purpose of the trusts created by this my will or in their discretion to sell and dispose of the same and reinvest the proceeds thereof in such securities as shall then be authorized as trust investments by the laws of the State of New York. * * *"

"Eleventh: I hereby nominate, constitute and appoint my friends Edward De-Witt and Stephen J. McGarrigle who are now members of the firm of DeWitt, Lockman & DeWitt having their office at No. 88 Nassau Street in the Borough of Manhattan City of New York executors of this my will and it is my will and I direct that no bond or other security shall be required by any surrogate probate court or judge of any court of or from my executors and my trustee hereinbefore named in this my will for the faithful performance of their or its duties under this my will or on account of the non-residence of such executor and trustee. * * *"

Shortly after their qualification, the prices of agricultural products, as well as dairy cattle, had so materially declined the executors felt it against the best interests of the estate either to sell the farm or the dairy, stock, and equipment at that time, and that, while keeping the cattle and the farm, it was best to operate the latter in order to feed the former. At the same time the water supply upon the farm had become exhausted and water for the herd was being hauled from Easton. These matters were brought to the attention of the orphans' court by petition, with the result that the executors were authorized to continue farm operations and to sink an artesian well upon the farm; the cost of the latter to be borne by the principal of the estate.

The court, upon petition of the executors filed October 21, 1930, authorized them to sell for not less than their appraised value, publicly or privately, such stocks belonging to the estate as might be deemed advisable. However, stocks had begun to decline in prices and the executors were never able to sell any of them at their appraised value. The record discloses eight specific instances between October 21, 1930, and April 16, 1935 (the date upon which the sale of the remainder of the stocks was reported), in which the court was fully informed by petitions of the executors as to the steady decline in the market values of these securities. In many of the petitions it was suggested that to dispose of the stocks at then prevailing prices would mean a great sacrifice to the estate, but in each of these instances the situation was fairly and impartially placed before the court. In some cases, upon the petition of executors, the court authorized the sale of a part of the stocks at prices then prevailing in order to bring about a reduction of the indebtedness upon them, thus, as it was thought, preventing a sacrifice of all these issues. Likewise from August 18, 1931, to February 26, 1935, nine petitions were presented and considered by the court, in which, because of the low prices of these stocks and consequent loss to the estate by then disposing of them, the court, upon each of these, ordered a six months' extension of the time in which to close the estate. It is thus undisputed that throughout the period of administration, the executors kept the court informed as to their activities, and sought its guidance in all matters; the result being that the remaining stocks in the hands of the executors were not disposed of until March 29, 1935.

Among the stocks belonging to the estate was an item of 1,000 shares of preferred and 500 shares common of the "Passwall Corporation," which after the death of the testator was amended to read "Eastern Shares Corporation." Equity Corporation, an investment trust organization, had offered to exchange its stock for that of the Eastern Shares Corporation held by the executors, by which it was first understood that the Goldsborough estate would receive 1,850 shares preferred and 2,500 shares common of its stock. The executors, believing such an exchange would be to the advantage of the estate, brought the matter to the attention of the orphans' court and received its authority to make the exchange. It was later discovered, however, that by the offer of exchange the Goldsborough estate was to receive only 850 shares of Equity Corporation $3 preferred stock and 2,500 shares of its common stock, and upon petition of the executors the court amended its previous order to cover the terms of the exchange.

On June 21, 1934, the executors filed their first account which covered the period from date of...