Grim's Appeal

• Decision Date: 06 October 1884
• Citation: 105 Pa. 375
• Parties: Appeal of Grim et al.
• Court: Pennsylvania Supreme Court

105 Pa. 375

Appeal of Grim et al.

Supreme Court of Pennsylvania.

February 19, 1884.

October 6, 1884.

February 19, 1884.

Before MERCUR, C. J., GORDON, PAXSON, TRUNKEY, STERRETT, GREEN and CLARK, JJ.

APPEAL from the Orphans' Court of Lehigh county: Of January Term, 1883, No. 303.

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Edward Harvey (Thomas B. Metzger with him), for appellants. —An executor or administrator cannot directly or indirectly purchase at his own sale, whether made under a power in a will, or by an order or decree of court, or under an execution. If he purchase he shall be considered a trustee for the parties interested in the estate, and shall account for the utmost extent of advantage made by him of the subject so purchased. Sugden on Vend. and Pur. (8 Am. ed.), 688; 2 Williams on Executors, 1005; Rogers v. Rogers, 1 Hopk., 525; Davoue v. Fanning, 2 Johns. Ch., 252; Beeson v. Beeson, 9 Barr, 288; Lazarus v. Bryson, 3 Binney, 60; Campbell v. Penn Life Ins. Co., 2 Wharton, 53; Webb v. Dietrich, 7 W. & S., 401; Painter v. Henderson, 7 Barr, 50; Chorpenning's Appeal, 8 Casey, 315; Dundas' Appeal, 14 Smith, 325. It makes no difference what the property is. The rule applies where the purchase is of a share in a copartnership: Cook v. Collingridge, Jacob, 621.

The appellants are femes covert, and cannot ratify a breach of trust by acquiescence. 1 Perry on Trusts, § 467; 2 Perry on Trusts, § 849; Bigelow on Estoppel, 510; Kelly on Contracts of Married Women, 122; Wharton on Contracts, § 89; Bond v. Bunting, 28 Smith, 215; Dampf's Appeal, 1 Outer., 371; Walker v. Symonds, 3 Swans., 69; Hopkins v. Myall, 2 R. & M., 86; Ryder v. Bickerton, 3 Swans., 80; March v. Russell, 3 M. & Cr., 31; Nail v. Punter, 5 Sim., 556; Kellaway v. Johnson, 5 Beav., 319; Bateman v. Davis, 3 Madd., 98; Cocker v. Quayle, 1 R. & M., 535; Lord Montford v. Lord Cadogan, 19 Ves., 639; Barton's Estate, 1 Parsons, 27; Keen v. Coleman, 3 Wright, 302; Klein v. Caldwell, 10 Norris, 140; Keen v. Hartman, 12 Wright, 500; Glidden v. Strupler, 2 Smith, 400; Rumfelt v. Clemens, 10 Wright, 455; Innis v. Templeton, 14 Norris, 262.

The children of the testator had no jus disponendi over the corpus of the estate. Estoppel applies only to rights existing in the party at the time of the acquiescence. Bigelow on Estoppel, 471; 1 Perry on Trusts, § 467; Bennett v. Colley, 5 Sim., 181; Browne v. Cross, 14 Beav., 105; Dillett v. Kemble, 10 C. E. Green, 69; Parkes v. White, 11 Vesey, 219. The paper claimed to estop us was made for another purpose, was without consideration, and in no way induced a line of conduct different from what would have been pursued if it had not been signed. Hence there is no estoppel. Bigelow on Estoppel, 508; Campbell v. McLain, 1 Smith, 200; Hoffman Steam Coal Co. v. Cumberland C. and I. Co., 16 Md., 456. In no case can delay or silence estop those who are incapable of making contracts. At any rate this proceeding is within the legal period of six years within which the title to personal property must be asserted. Bergen v. Bennett, 1 Caines' Cas., 1; Hawley v. Cramer, 4 Cowen, 719; Robinson v. Hook, 4 Mason, 151; Baker v. Whiting, 3 Sumner, 486; Boone v. Chiles, 10 Peters, 223; Ashhurst's Appeal, 10 Smith, 290.

If the sale to himself was fraudulent we are entitled to have him surcharged with the profits of the business. Cooke v. Collingridge, supra; Robinett's Appeal, 12 Casey, 191; McDonald v. Richardson, 5 Jur. N. S., 9; Rosenberger's Appeal, 2 Casey, 67; Norris' Appeal, 21 Smith, 106; Drysdale's Appeal, 2 Harris, 531; McKnight v. Walsh, 24 N. J. Eq., 498. These profits belong to the estate — not to the widow or annuitant. Foster v. Smith, 2 Y. & C., 193; Darbon v. Rickards, 14 L. J. N. S. Eq., 344; Earp's Appeal, 4 Casey, 368; Wiltbank's Appeal, 14 Smith, 256; Moss' Appeal, 2 Norris, 264; Vinton's Appeal, 3 Out., 434; Eastwick's Estate, 39 Leg. Int., 265. If the sale was valid, the executor should be surcharged with $2,000, being the amount offered by A. S. Grim over and beyond the appraisement.

The amount received from the firms of H. & J. Schnurman and H. Schnurman & Co., was $1,015.91 less than the appraised debt. Hence the whole sum must have been principal — no justification can be found for treating a part of it ($1,700) as interest.

An advancement can only be made by a parent to a child or grandchild. The debt due by the accountant cannot be so treated. High's Appeal, 9 Harris, 283; Hengst's Estate, 6 Watts, 87; Yundt's Appeal, 1 Harris, 575; Miller's Appeal, 7 Casey, 337; Watson v. Watson, 6 Watts, 254.

R. E. Wright, Jr. (R. E. Wright with him), for appellee.— The rules applicable to ordinary real and personal property do not apply to an interest in a firm, which is not a title to the goods, but a mere chose in action. Collyer on Partnership, 6th ed., 151 n., 950; Gratz v. Bayard, 11 S. & R., 41; Smith's Estate, 33 Leg. Int., 149; Hanna v. Wray, 27 Smith, 27; Lloyd v. Thomas, 29 Smith, 68; Tillotson v. Tillotson, 34 Conn., 335; Horton's Appeal, 1 Harris, 67; Lucas v. Laws, 3 Casey, 211; Trotter v. Shippen, 2 Barr, 358; Pearce v. Chamberlain, 2 Ves. Sr., 33; Hutchinson v. Smith, 7 Paige Ch., 35; 2 Lindley on Part., 867-895.

The appellants are estopped from attempting to surcharge the executor by acquiescence and positive encouragement and approval. Ashhurst's Appeal, 10 Smith, 290; Beeson v. Beeson 9 Barr, 286; Share v. Anderson, 7 S. & R., 63; Brown v. Caldwell, 10 S. & R., 114; Stroble v. Smith, 8 Watts, 280; Adlum v. Yard, 1 Rawle, 171; Painter v. Henderson, 7 Barr, 48; Wilson v. Bigger, 7 W. & S., 111. Estoppel will operate against a married woman in those matters as to which she is not incapacitated. Wharton on Contracts, § 89; Bispham's Equity, 2d ed., § 293; Keen v. Hartman, 12 Wright, 497; Keen v. Coleman, 3 Wright, 299; Innis v. Templeton, 14 Norris, 267; Knight v. Thayer, 125 Mass., 25. As to the matter here there was capacity to contract. Act of April 11, 1856, § 4; Purdon, 1009.

Increase in the value of the thing itself, profits accrued before the devise, are a part of the corpus, but all accruing profits and additions are earnings or income. Hence, if any one is entitled to claim it is the widow and not the appellants. Moss's Appeal, 2 Norris, 264; Wiltbank's Appeal, 14 Smith, 256; Earp's Appeal, 4 Casey, 368.

The executor did not accept Grim's offer, but he increased the rental of the store (which belonged to the estate) from $1,500 to $2,000 per annum, which was more profitable to the estate. The settlement with the representatives of the firms of H. & J. Schnurman and H. Schnurman & Co. was made several years after testator's death. The claim was disputed, and finally a compromise (which the auditor found was fair, proper, and for the best interests of the estate) was made for a round sum of about $16,000. The estate would have been entitled to interest on its claim, hence it was proper to regard a part of this sum as interest.

The testator directed that the debts of his sons-in-law should be treated as advancements. That of accountant was deducted from his wife's share. It, therefore, did not, as appellants claim it should, bear interest. Miller's Appeal, 7 Casey, 337; Green v. Howell, 6 W. & S., 203.

Mr. Justice CLARK delivered the opinion of the court, October 6, 1884.

At the decease of Henry Schnurman, the partnership stock of Schnurman, Newhard & Co. was valued and appraised at the sum of $16,394.30. No fraud is alleged, nor is it asserted that the sum named does not fairly represent its full value. Neither the executor nor the heirs had any right to take the decedent's place in the partnership, nor to compel the continuance of the business. The stock on hand was rightfully in the possession of the surviving partners, the legal ownership of that stock, for the purposes of liquidation, was in them, and they had the right, acting honestly and with reasonable discretion and diligence, to dispose of it as they pleased. It was their duty to turn it into available and distributable form, pay the debts, and divide the surplus. The executor possessed no power of sale or other authority over it; he had the right merely to compel an account, and payment accordingly. The decedent's estate was entitled to receive from the surviving partners, upon a general statement of the partnership accounts, after payment of the firm debts and settlement of its affairs, three-eighths of the surplus remaining. The settlement involved a conversion of the common stock into money, and it was in the proceeds of the conversion the executor had a right to participate.

The forced conversion of a large stock of merchandise into money is often attended with the most ruinous consequences, and the mode in which it is to be effected, in any given case, is often of the utmost importance. The administrator or executor of a deceased partner, having in view the best interests of the estate, may settle with the surviving partners on such terms as in the exercise of good faith and a reasonable discretion he may choose to accept; but as the surviving partners are in some sense trustees of the deceased partner's interest, both they and the executor must be held to the exercise of the utmost good faith. The surviving partner may, however, in the interests of trade, purchase from the executor, at a fair valuation, the unascertained share of the deceased partner, and avoid the ruinous results of a general sale. This form of settlement is not infrequent, and, if the parties act bona fide, and with proper discretion, it sometimes affords an easy solution to the difficulties which may arise in such cases. In such a case the affairs of the estate are guarded by the executor, whose interest it is to realize as largely as he can, and who has no interest otherwise.

The purchase of the undivided interest of a deceased partner by the executor of his estate in his own behalf, is viewed with more suspicion. In such case...