In re Shelley's Estate
| Decision Date | 26 June 1926 |
| Docket Number | 193,194 |
| Citation | 287 Pa. 105,134 A. 468 |
| Parties | Shelley's Estate |
| Court | Pennsylvania Supreme Court |
Argued May 11, 1926
Appeals, Nos. 193 and 194, Jan. T., 1926, by L. Edward Herr and Emma J. Herr, Administratrix of Reinicker F. Herr deceased, from decree of O.C. York Co., dismissing exceptions to auditor's final report, in Estate of Annie E. Shelley deceased. Reversed.
Exceptions to final report of Frederick B. Gerber, Esq., auditor on distribution. Before NILES, J. [*]
The opinion of the Supreme Court states the facts.
Exceptions dismissed. L. Edward Herr and Emma J. Herr, administratrix of Reinicker F. Herr, deceased, appealed.
Error assigned was, inter alia, decree, quoting record.
The decree of the court below is reversed and the record is remitted that distribution may be made in accordance with the views expressed in this opinion; costs to be paid by appellee.
George Hay Kain, with him Samuel K. McCall and Richard E. Cochran, for appellants. -- The doctrine of equitable election is founded on the intention of the author of the instrument, which must, as I apprehend, be collected from the face of the instrument itself. When the intention necessary to raise the question of election is clearly expressed or necessarily implied, the party to whom a benefit is given by the instrument but claiming a right adverse thereto, may either be compelled to make his election, or otherwise to make compensation out of what is thereby given to him. But unless the intention be so expressed or implied, he cannot be put to his election nor called on to make compensation: Stump v. Findlay, 2 Rawle 168; Phila. v. Davis, 1 Wh. 490.
Stoolfoos v. Jenkins, 12 S. & R. 399, seems to be a direct authority to the effect that in the absence of fraud an infant cannot be bound by the legal consequences of his act. The same principle was applied to married women in Keen v. Coleman, 39 Pa. 299.
Before a legatee can be obliged to elect, the amount to which he is entitled under the will must be settled and ascertained, and he must have knowledge of his right. Without this, his receipt for a length of time of the benefits provided by the will does not conclude him: Kreiser's App., 69 Pa. 194; White's Est., 23 Pa.Super. 552; Woods v. Wilson, 37 Pa. 379; Bittner v. Coal Co., 271 Pa. 579; Woodburn's Est., 138 Pa. 606; Anderson's App., 36 Pa. 476; Dickinson v. Dickinson, 61 Pa. 401.
It is well settled that the rule of election is compensation, not forfeiture: Phila. v. Davis, 1 Wh. 490; Lewis v. Lewis, 13 Pa. 79; Van Dyke's App., 60 Pa. 481, 492; Penna. Co. v. Stokes, 61 Pa. 136, 140; Little's App., 3 Walk. 225; Vance's Est., 141 Pa. 201, 210; Zimmerman v. Lebo, 151 Pa. 345, 350; Cumming's Est., 153 Pa. 397.
Recovery is barred by lapse of time: Ashhurst's App., 60 Pa. 290; Evan's App., 81 Pa. 278; Emaus Orphans' House v. Kendig, 1 Pears. 34; Gernet v. Lynn, 31 Pa. 94; McCormick v. Sypher, 238 Pa. 185; Lloyd's Est., 281 Pa. 379; Walker v. Walker, 16 S. & R. 379.
Frank Gosnell, with him Schmidt, Keesey, Stair & Kurtz, for appellee. -- The claim of Goucher College against Miss Shelley's estate in this case is for the proceeds of the two life insurance policies amounting to $10,000 based on the equitable doctrine of election. Miss Shelley having elected to take under her father's will a life estate in his Hill Island Farm, her interest in the proceeds of the policies was thereby cut down to a life estate: Hamilton v. Buckwalter, 2 Yeates 389; Cauffman v. Cauffman, 17 S. & R. 16, 24; Tiernan v. Roland, 15 Pa. 429; Cox v. Rogers, 77 Pa. 160; Boileau's Est., 201 Pa. 493; Bradfords v. Kents, 43 Pa. 474; Mebus's Est., 273 Pa. 505.
Goucher College is not affected by laches or limitations: Montgomery's App., 77 Pa. 370.
Before MOSCHZISKER, C.J., FRAZER, WALLING, SIMPSON, KEPHART, SADLER and SCHAFFER, JJ.
William H. Shelley took out two policies of life insurance for $5,000 each on his own life, and in 1890 assigned them to his minor daughter. On his death, ten years later, the proceeds were paid to her guardian. Upon arrival at majority in 1902, an amount, including this sum, was delivered, by order of the orphans' court, to the ward, and retained by her until November 3, 1922, when she died. Her entire estate, now for distribution, is much in excess of the sum received when she became of age. The Woman's College of Baltimore (now Goucher College) presented a claim for $10,000 to the auditor appointed to distribute the balance in the hands of her executors, and the right to demand payment of it gave rise to the present litigation.
The father made a will in 1898, which was probated after his death in 1900, and named Doctor Goucher executor. The latter was then president of the institution above referred to, and continued to act in that capacity until 1908. An inventory of the estate was filed in which no reference is made to the insurance paid to the guardian of the daughter. A first but not a final account of the administration appears, and the executor was never discharged. During his lifetime, he made no demand for the return of the money received from the insurance company, so far as the record discloses, or for the payment of any sum from the daughter.
By the will of the father, personal property of the value of $378, bequeathed to Miss Shelley by paragraph four, was delivered to her guardian. Section five directed that the proceeds of the two policies of insurance, which had been previously transferred to her, and subsequently paid, as noted above, should be held in trust for the daughter, and, upon her death without children, the principal used for the Woman's College, to be appropriated as therein provided. The executor was directed to invest this insurance fund in government or municipal bonds, and pay the income in the manner set forth, but he never collected the same. It was delivered to the guardian, a fact of which Doctor Goucher had full knowledge, he having at the same time received the proceeds of a third policy, standing in the name of the estate, and later distributed this money under the terms of the will.
Paragraph eight devised a farm to the executor to sell and invest the purchase price, the income to be paid to Miss Shelley for life, and, upon her death, without children, the remainder was bequeathed to the Woman's College. The land was not sold, and the rents, less expenses, were for two years turned over to the guardian, and, after 1902, when the ward attained majority, to the life tenant named. The net amount received until 1922, when Miss Shelley died, does not appear. It is insisted that the receipt of the income derived from the land constituted an election to take under the will, and, since benefit from one provision was accepted, the daughter was bound to see that all parts of it were given force and effect, thereby relinquishing her absolute right to the proceeds of the insurance, which it was her duty to surrender to the estate for distribution, as provided in paragraph five.
If an election to take under a will is made apparent, then the beneficiary, who acquires thereby some new advantage, is bound by the instrument as a whole: Hamilton v. Buckwalter, 2 Yeates 389; Phila. v. Davis, 1 Whart. 490; Zimmerman v. Lebo, 151 Pa. 345. This purpose may be evidenced by the conduct of the parties, acting with full knowledge of the legal effect of their act ( Melot's Est., 231 Pa. 520; Boileau's Est., 201 Pa. 493; Bradfords v. Kents, 43 Pa. 474; Cox v. Rogers, 77 Pa. 160), but is not to be inferred unless the intention is clearly apparent: Davis v. Davis, 46 Pa. 342. If the legatee or devisee sees fit not to give up property owned by him, and attempted to be disposed of by the testator, he does not forfeit his entire interest, unless the new provision exceeds it in value, but must compensate the legatee, who is disappointed, by payment, from the fund taken, of a sum sufficient, if such there be, for it is the source which must be looked to by the donee, and which measures the extent of the right to reimbursement: Cauffman v. Cauffman, 17 S. & R. 16; Armstrong v. Walker, 150 Pa. 585; Cooley v. Houston, 229 Pa. 495, s.c. 247 Pa. 590; 5 A.L.R. 1628, note. There was not enough evidence in the present case to show the net income of the farm received by Miss Shelley, so that the principle of compensation could be applied, if the legal rule as to election was here enforceable, as insisted upon by the claimant.
It is clear that, without regard to the will, the daughter was entitled to the insurance fund. With the knowledge of the executor, it was paid to the guardian, and later transferred to her, and retained without protest for more than twenty years. To show that she elected to surrender the right to this money, and to hold it for life only, under paragraph five, the only evidence is the actual receipt by the guardian of the small amount of personalty, and by her of the rent from the farm, which the executor had been directed to sell and invest the proceeds. It is to be noted that, irrespective of the will, she was entitled, under the intestate laws, to the income, for the remainder was to become effective only if she died without children, and her election to keep the insurance would not have accelerated the termination of the life interest (Portuondo's Est., 185 Pa. 472), nor destroyed it: Reighard's Est., 253 Pa. 43. It is not clear that Miss Shelley, either by words or conduct indicated an intention to subject her interest to the limitations imposed by paragraph five. Even if so, the rule as to compensation only was applicable, but, as we view the case, a further discussion of this proposition becomes unimportant, since the decision must rest on the ground taken by the auditor, whose...
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