Miller v. Hawkins
| Decision Date | 24 November 1964 |
| Citation | 416 Pa. 180,205 A.2d 429 |
| Parties | William B. MILLER, Merton J. Miller, Jean Marie Miller King and Glenn E. Miller, Appellants, v. Harried A. HAWKINS, Formerly Harriet A. Miller, in her own right and as Executrix of the Estate of W. B. Miller, Deceased, now by substitution, Lynn Hawkins, Executor of the Estate of Harriet A. Hawkins, and the National Bank and Trust Company of Erie, formerly Guardian of William B. Miller, Merton J. Miller, Jean Marie Miller King, and Glenn E. Miller. In the Matter of the ESTATE of W. B. MILLER, Deceased. William B. MILLER, Merton J. Miller, Jean Miller King and Glenn E. Miller, Appellants, v. Harriet A. HAWKINS, Formerly Harriet A. Miller, in her own right and as Executrix of the Estate of W. B. Miller, Deceased, now by substitution, Lynn Hawkins, Executor of the Estate of Harriet A. Hawkins, and Lynn Hawkins, her husband, C. M. Oliver, now by substitution, Marjorie F. Oliver, Executrix of the Estate of C. M. Oliver, H. W. Loveland, South Penn Oil Company and United Refining Company. In the Matter of the ESTATE of Harriet A. HAWKINS, Deceased. Appeal of William B. MILLER, Merton J. Miller, Glenn E. Miller, and Jean Miller King. |
| Court | Pennsylvania Supreme Court |
John W. English, John A. Bowler, English, Gilson, Bowler, Shamp & Levin, Erie, for appellants.
Mutzabaugh & Mutzabaugh, R. T. Mutzabaugh, Bradford, for appellees.
Before BELL, C. J., and MUSMANNO, JONES, COHEN, EAGEN, O'BRIEN and ROBERTS, JJ.
These three appeals attack, respectively, the validity of two decrees and an order of the Orphans' Court of McKean County entered in three separate actions all bottomed upon alleged misconduct on the part of Harriet Miller Hawkins while acting as the executrix of the Estate of W. B. Miller, deceased. 1
W. B. Miller, [decedent], a McKean County resident, died, testate, on November 25, 1936. By will, he disposed of his estate in the following manner: 15% to his brother Frank Miller, 15% to his sister Lillie Oliver, 55% to his wife Harriet Miller [later Mrs. Hawkins], and 15% to his brother Glenn Miller. Glenn Miller predeceased decedent leaving a wife, Autumn Miller, (later Autumn Orso), and four children [the present appellants], all of whom were minors when decedent died. 2 Harriet Miller, [Mrs. Hawkins], was named and served for 25 years as sole personal representative of decedent's estate.
Among decedent's assets were: (1) feeowned tracts of oil producing land situated in McKean County; (2) a lease-hold interest in an eight acre tract of oil producing land in McKean County; (3) a 3/8ths interest in a partnership known as Bradford Petroleum Company [Bradford Petroleum]. Assets (1) and (2), known as the 'Tip Top Properties', [Tip Top], were non-contiguous properties upon which were located, inter alia, 111 oil wells and 48 water wells. Asset (3) was a 3/8ths interest in a partnership, composed of decedent, one H. W. Loveland and one C. M. Oliver, which owned oil and gas leases and tracts of oil producing land with valuable improvements and equipment thereon located in McKean County. Mrs. Hawkins, as executrix, operated all the properties represented by these assets, including the partnership itself, after decedent's death for many years.
Approximately three years after decedent's death, the National Bank and Trust Company of Erie, [Bank], acting as appellants' guardian, petitioned the Orphans' Court of McKean County for permission to sell, at private sale, appellants' 15% interest in Tip Top for $20,000. By order of that court, on January 25, 1940, appellants' interest in Tip Top was sold to a purchaser, undisclosed in the sale petition, Mrs. Hawkins as an individual. Approximately six months after decedent's death, Mrs. Hawkins had purchased the 3/8ths interest of decedent's estate in Bradford Petroleum for a stated consideration of $48,700.99 but an actual consideration of $75,000 3 and, shortly after her marriage to Lynn Hawkins, she transferred this 3/8ths interest in Bradford Petroleum to Lynn Hawkins as a gift.
On December 12, 1946, the appellants--having all then attained their majority--petitioned the Orphans' Court of McKean County [25 December Term, 1946] to set aside the Bank's 1940 deed of conveyance of appellants' interest in Tip Top, for an accounting and to have Mrs. Hawkins declared a constructive trustee of their interest in Tip Top. Hearings on this petition were not held until June and July of 1960--fourteen years later--and Judge Hubbard, the then President Judge of the Orphans' Court of McKean County, on December 23, 1963, entered a decree nisi dismissing appellants' petition. On March 31, 1964, Judge Mencer, the present President Judge, affirming Judge Hubbard, entered a final decree from which an appeal has been taken. (246 March Term, 1964).
On June 1, 1954, appellants petitioned the Orphans' Court of McKean County [27 June Term, 1954] to set aside the sale of decedent's interest in Bradford Petroleum, for an accounting and a declaration that Mrs. Hawkins, Lynn Hawkins and all subsequent transferees of said interest be declared constructive trustees. Hearings on that petition were held in July 1960--six years later--and again President Judge Hubbard on December 27, 1963, entered a decree nisi dismissing appellants' petition and on March 31, 1964, President Judge Mencer, affirming Judge Hubbard, entered a final decree from which an appeal has been taken (247 March Term, 1964).
Mrs. Hawkins died, testate, on June 10, 1961, and, under her will, Lynn Hawkins, her husband, was named executor of her estate. Two days after the expiration of the twelve month period, subsequent to the last advertisement of the grant of letters testamentary but prior to filing any inventory or account in the estate, Lynn Hawkins distributed all the assets of the Estate of Mrs. Hawkins to the persons entitled under her will. On August 19, 1963, appellants petitioned the Orphans' Court of McKean County [18 October Term, 1963] to require Lynn Hawkins to file an accounting of his administration of the estate and to file surety bonds; after hearing, the court directed that Lynn Hawkins file such accounting and post surety bonds totalling $350,000. Thereafter, Lynn Hawkins, having failed to file surety bonds in accordance with the court order, was held in contempt of court. In December 1963 the appellants cited Lynn Hawkins and those persons to whom distribution of the Estate of Mrs. Hawkins had been made to show cause why the assets distributed to them should not be returned to the court and also to show cause why the person of Lynn Hawkins should not be attached for contempt. On March 31, 1964, President Judge Mencer dismissed both petitions and from that order an appeal has been taken. (273 March Term, 1964).
This consolidated record indicates that, in the first two actions, appellants seek restoration of their interests in decedent's estate which they claim were illegally and improperly disposed of by Mrs. Hawkins acting as fiduciary for the Miller Estate and, in the third action, appellants seek to preserve the assets of the Mrs. Hawkins' Estate until such time as their claims in the first two actions are established.
ACTION TO SET ASIDE GUARDIAN'S SALE OF APPELLANTS' INTEREST IN TIP TOP (246 March Term, 1964).
In this action, the 1946 action, appellants endeavored to set aside the 1940 court-approved guardian's sale of their interest in Tip Top to Mrs. Hawkins personally. The basis of this action was that Mrs. Hawkins, while acting as fiduciary of the Miller Estate, improperly induced the Bank, guardian of appellants' interests, to sell appellants' interest in Tip Top to her for $20,000, an unfair, inadequate and improvident consideration; that, by fraud, misrepresentation and concealment of essential facts, the Bank was induced to request the court to approve the sale; that the court was misled, by misrepresentation, fraud and concealment, to approve the sale; that, by reason thereof, the sale should be set aside and appellants restored to their rights.
After decedent's death and until the guardian's sale, Mrs. Hawkins, as executrix, exclusively managed and operated the Tip Top properties and, from such experience, knew not only the then value but the potential value of Tip Top. 4 During such period, Mrs. Hawkins made some disbursements--comparatively small in amount--on appellants' interest to the guardian Bank but she never furnished any statement to the Bank showing receipts and expenditures in reflection of the Tip Top operation until after the guardian's sale. 5
In the meantime, the pattern of things to come was shaping. Shortly after decedent's death, Mrs. Hawkins approached Autumn Miller, appellants' mother, (whom Mrs Hawkins and her counsel mistakenly believed had a 1/3 of appellants' 15% interest), and, in an effort to purchase her interest, told her that Lillie Oliver--owner under the Miller will of a 15% interest--had agreed to sell her interest for $20,000. It is uncontradicted that Lillie Oliver had never agreed to sell her interest. The same misrepresentation was made by Mrs. Hawkins by letter to the Bank. Sometime thereafter, Mrs. Hawkins' counsel misrepresented by letter to the guardian Bank that Lillie Oliver had given an option for the purchase of her interest. While it is true that Frank Miller--holder of another 15% interest--had sold Mrs. Hawkins his interest for $20,000, the misrepresentations to the guardian Bank and appellants' mother as to Lillie Oliver were untrue and obviously made to induce them to believe in the adequacy of the price of $20,000 and the suitability of a sale. Moreover, as a possible 'club' to induce the sale, Mrs. Hawkins' counsel represented to the guardian that the Miller estate held a $1100 mortgage against its wards' mother's property although Mrs. Hawkins well knew such mortgage, at decedent's suggestion, had been placed on the property simply...
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