In re Pollock's Estate

• Court: Pennsylvania Supreme Court
• Writing for the Court: MR. JUSTICE DREW:
• Citation: In re Pollock's Estate, 159 A. 555, 306 Pa. 301 (Pa. 1932)
• Decision Date: 03 February 1932
• Docket Number: 313,337
• Parties: Pollock's Estate

159 A. 555

306 Pa. 301

Pollock's Estate

Nos. 313, 337

Supreme Court of Pennsylvania

February 3, 1932

Argued December 2, 1931

Appeals, Nos. 313 and 337, Jan. T., 1931, by Girard Trust Company et al., executors of will of Margaret Pollock deceased, and by Roland D. Pollock, from decree of O.C Phila. Co., dated May 20, 1931, dismissing exceptions to adjudication, in estate of James Pollock, deceased. Reversed.

Exceptions to adjudication of VAN DUSEN, J.

The opinion of the Supreme Court states the facts.

Exceptions dismissed in opinion by GEST, J., STEARNE and SINKLER, JJ., dissenting. See 15 Pa. D. & C. 147.

Roland D. Pollock, and Girard Trust Company et al., executors of Margaret Pollock, deceased, appealed.

Errors assigned by both appellants were in dismissing exceptions and in sustaining the decree which was as follows, quoting it:

And now, to wit, this 20th day of May, A.D., 1931, the above case having come before the court upon exceptions to the adjudications of VAN DUSEN, J., dated October 3, 1930, and February 2, 1931, and arguments thereon having been heard, it is ordered, adjudged and decreed that said adjudications of VAN DUSEN, J., are modified and confirmed so as to read as follows:

The balance of principal as shown by the ac-

count is

$260,700.00

(composed of 2,370 shares of stock of Pol-

lock-Huston Company)

From which are to be deducted the follow-

ing costs and expenses:

Counsel fee to Messrs. Erdman and Mc-

Cracken

$375.00

One-half costs of filing account

37.75

Balance for distribution

$260,700.00

Which said balance is awarded to Roland D. Pollock.

The account shows no balance of income, the distribution taking up all the income.

Roland D. Pollock is surcharged with 1,185 shares of Pollock-Huston Company stock in income account (which he has in his possession), and these shares are awarded to Girard Trust Company, Lillian P. Ferguson and Charles B. Heston, Jr., executors of the will of Margaret Pollock, deceased, conditioned upon the payment by them of $300 to Robert W. Archbald, Jr., trustee ad litem, $375 to Messrs. Erdman and McCracken, and $37.75 towards costs of filing the account.

GEST, J.

The decree is reversed, and all costs incident to this proceeding are charged against the contestants.

Robert T. McCracken, with him John F. Headley and Henry P. Erdman, for appellant, Roland D. Pollock. -- Appellant was not a trustee for his mother: Devine's Est., 199 Pa. 250; Lafferty's Est., 230 Pa. 496; Gould's Est., 270 Pa. 535.

Appellant was given the beneficial interest in the stock bequeathed him.

The will created an equitable charge: McFait's App., 8 Pa. 290; Hanna's App., 31 Pa. 53; Pierce v. Livingston, 80 Pa. 99; Hammond's Est., 197 Pa. 119; Moran's Est., 13 Pa.Super. 251; Gumaer's Est., 19 Pa.Super. 621; Fleming v. Fleming, 204 Pa. 648.

The requirement of security resulted in a debtor-creditor relationship: Reiff's App., 124 Pa. 145; Letterle's Est., 248 Pa. 95; Weir's Est., 251 Pa. 499; Kirkpatrick's Est., 284 Pa. 583; Strawbridge's Est., 14 Pa. D. & C. 703; Fidelity, etc., Deposit Co. v. Dietz, 132 Pa. 36.

There was no confidential relation between appellant and his mother which placed the burden of proof on appellant: Null's Est., 302 Pa. 64; Crothers v. Crothers, 149 Pa. 201; Sawyer v. White, 122 F. 223; Keen's Est., 299 Pa. 430; Koons's Est., 293 Pa. 465.

Even assuming the burden of proving uberrima fides was on appellant, it was effectively carried: Thorndell v. Munn, 298 Pa. 1; Null's Est., 302 Pa. 64; Carney v. Carney, 196 Pa. 34.

The statute of limitations has run against the claim of contestants: Etter v. Greenawalt, 98 Pa. 422; Hostetter v. Hollinger, 117 Pa. 606; Dorrance v. Ryon, 35 Pa.Super. 180; Ashhurst's App., 60 Pa. 290.

If appellants are entitled to anything they are entitled to a return of the stock: Musselman v. Eshleman, 10 Pa. 394; Willits's Est., 18 Phila. 167; Church v. Winton, 196 Pa. 107; Beeson v. Beeson, 9 Pa. 279; Smedley v. Varley, 23 Beav. 358.

There has been no demand by appellants for the return of the stock dividend, and no unqualified refusal by appellee: Taylor v. Hanlon, 103 Pa. 504; Allison v. Montgomery, 107 Pa. 455; Spear v. Alexander, 2 Phila. 89; Prentiss v. Hannay, 4 Whart. 508; Wright v. Leather Co., 257 Pa. 552.

Ira Jewell Williams, of Brown & Williams, for appellants, Girard Trust Co. et al., executors of will of Margaret Pollock, deceased. -- Accountant was a trustee: Mooney's Est., 205 Pa. 418; Smith's Est., 144 Pa. 428.

Accountant, having tried the case below on the theory of his admitted trusteeship, and having filed his sworn account as trustee, may not now disclaim the trust relation: Rankin v. Rodgers, 302 Pa. 17; Sakman v. McCormick, 278 Pa. 268; Morrett v. Fire Assn., 265 Pa. 9; Knecht v. Knecht, 261 Pa. 410; Achenbach v. Stoddard, 253 Pa. 338; Armstrong & Latta v. Phila., 249 Pa. 39.

The waiver of security did not affect the measure of accountant's duty.

The will did not create an equitable charge: McFait's App., 8 Pa. 290; Etter v. Greenawalt, 98 Pa. 422.

The burden was on the trustee to show that he had acted with the highest good faith: Thorndell v. Munn, 298 Pa. 1; Null's Est., 302 Pa. 64; Miller's App., 30 Pa. 478; Donner v. Donner, 211 Pa. 409; Hollenback's App., 121 Pa. 322, 342; Simon v. Simon, 163 Pa. 292, 301; Matthaei v. Pownall, 235 Pa. 460, 465, 467-8; Chiswell v. Campbell, 300 Pa. 68; Tanner's Est., 218 Pa. 361; Greenfield's Est., 14 Pa. 489; Wistar's App., 54 Pa. 63.

The relationship was fiduciary and confidential in the highest degree.

The burden of proving good faith was not borne; bad faith was clearly shown: Lawrence v. King, 299 Pa. 568; Nirdlinger's Est., 290 Pa. 457; Swift & Co. v. U.S., 111 U.S. 22; Eisner v. Macomber, 252 U.S. 189.

A defrauded cestui que trust is entitled to the value of the thing taken, at the time of taking; and is not restricted to the return of the res, especially if that remedy is illusory: Whitaker v. Houghton, 86 Pa. 48; Harger v. McMains, 4 Watts 418; Freas's Est., 231 Pa. 256; Chiswell v. Campbell, 300 Pa. 68; McKeown's Est., 263 Pa. 78; Reading Iron Works Est., 149 Pa. 182; Gervis v. Kay, 294 Pa. 518.

The contestants are entitled to the actual value as measured by the assets: Montgomery Bank v. Reese, 26 Pa. 143; Gervis v. Kay, 294 Pa. 518; Kountz v. Kirkpatrick, 72 Pa. 376; Lehigh & Wilkes-Barre Coal Co.'s Assessment, 298 Pa. 294, 300.

The law of Pennsylvania as to the valuation of stock, where no market value is established, is well known: Harris's App., 9 Sadler 233; Blood v. S. & L. Co., 164 Pa. 95; Duroth Mfg. Co. v. Cauffiel, 243 Pa. 24; McWilliams v. Altemus, 288 Pa. 277; Jarvis v. Bell, 296 Pa. 568.

It next becomes important to determine as of what date the award should be given. Contestants submit that they are at least entitled to be paid damages as of the time the wrong was committed: Bank of Montgomery v. Reese, 26 Pa. 143; Wilson v. Whitaker, 49 Pa. 114.

Interest should be allowed: Brooks-Scanlon Corp. v. U.S., 265 U.S. 106; Whitcomb v. Phila., 264 Pa. 277; Allegheny v. Campbell, 107 Pa. 530.

Before FRAZER, C.J., WALLING, KEPHART, SCHAFFER, MAXEY and DREW, JJ.

OPINION

MR. JUSTICE DREW:

In this case each side appealed. The decision of a single question in the negative will settle both appeals, but an answer in the affirmative will require passing upon another question, to wit, the proper measure of damage. The question is: Did the will of James Pollock create a trust in his son of certain stock for his widow? The lower court, by a vote of three to two, answered this question in the affirmative, and surcharged the alleged trustee with certain stock in specie.

James Pollock was a well-known citizen of Philadelphia. For fifty years prior to his death on September 26, 1917, he was engaged in the manufacture of carpet rugs. During the latter part of his life he did business as the Pollock-Huston Company, a Pennsylvania corporation with a capital stock of $300,000, divided into 3,000 shares of $100 par value. Of these he owned 2,480 shares, and his son and officers of his company held the remainder. His son had been associated with him in the business for twelve years, and at the time of his father's death was its general manager. Mr. Pollock left surviving him his wife, a son, and two daughters. In his will he said: "I give and bequeath to my son, Roland Dudley Pollock, Twenty three hundred and seventy (2370) shares of the capital stock of the Pollock-Huston Company, provided, however, and under the condition that he shall make payment of one half of all dividends that may be declared thereon of any kind or nature to my said wife for and during the term of her natural life." Other bequests were made, and the residue of the estate was given to the executors, Roland Dudley Pollock and Industrial Trust Company, for certain trusts. On the audit of the account of the executors, the 2,370 shares aforesaid were awarded to Roland Pollock. He accepted them with the condition attached, and his mother consented to the stock being delivered to him without his giving security to perform the condition. There was no suggestion then, nor at any time during the life of Mrs. Pollock, that the will created a trust of this stock. She lived twelve years after her husband and died on February 28, 1929, and shortly thereafter her executors, Girard Trust Company, Charles B. Heston, Jr., and Lillian F. Ferguson, a daughter and beneficiary under her will, called upon Roland Pollock to file an account of all dividends received by him on the stock. He filed the account and showed distribution to his mother of one-half of all cash dividends received by him, and distribution to himself of a stock dividend, one-half of which, or 1,185 shares,...