Mulholland v. Pittsburgh Nat. Bank
| Decision Date | 16 March 1965 |
| Citation | 418 Pa. 96,209 A.2d 857 |
| Parties | Laura E. MULHOLLAND, otherwise known as Peggy E. Mulholland, formerly Laura E. Millar, also known as Peggy E. Millar, formerly Laura E. Hoover, also known as Peggy E. Hoover, v. PITTSBURGH NATIONAL BANK, successor to Peoples First National Bank & Trust Company, and Richard Eastall Hoover, Michael Hoover, Deborah May Hoover and Liam Michael Mulholland. Appeal of Michael HOOVER, Deborah May Hoover and Liam Michael Mulholland. Appeal of PITTSBURGH NATIONAL BANK. |
| Court | Pennsylvania Supreme Court |
Rehearing Denied May 24, 1965.
Walter A. Koegler, Pittsburgh, for guardian ad litem.
Frank E. Coho, Johnston & Coho, Pittsburgh, for appellee.
Donald C. Bush, Griggs, Moreland, Blair & Douglass, Richard B Tucker, Jr., Patterson, Crawford, Arensberg & Dunn, John P Papuga, Pittsburgh, for Pittsburgh Nat. Bank.
Before BELL, C. J., and MUSMANNO, JONES, COHEN, EAGEN and ROBERTS, JJ.
Laura E. Mulholland, [appellee], [1] in 1940 married Richard Hoover. Of that marriage, dissolved by divorce in 1951, three children were born. Sometime prior to January 1953 she married Joseph Millar and of that marriage, dissolved by divorce in 1953, no children were born. Thereafter, she married Harold Mulholland and of that marriage one child has been born.
On many occasions in the period 1943-1950, by reason of appellee's excessive drinking, Richard Hoover, then appellee's husband, was compelled to hospitalize her in an attempt to cure her. On March 30, 1950, the Court of Common Pleas of Allegheny County declared appellee an 'inebriate' and committed her to a Pennsylvania hospital where she remained until October 3, 1950, at which time the court provisionally released her. Thereafter, appellee went to Clearwater, Florida. While there she resumed her drinking to the extent that Richard Hoover removed the children, who had gone to Florida on a visit in January 1951 from her custody. [2]
On February 4, 1953, on petition of her father, appellee was adjudged by the Court of the County of Pinellas in Florida an 'incompetent by reason of drunkeness, excessive use of drugs, chronic inebriacy, impulsive drinking, orgies, and occasional violence constituting anti-social psychopathy'. That court appointed appellee's father as guardian of appellee's person and he placed her in a Louisiana Sanitarium. In February 1954, upon application of her father, appellee was adjudged by the Court of Common Pleas of Allegheny County an inebriate, and appellee, having been returned to Pittsburgh, was committed to a Pennsylvania institution. Less than four months later, appellee was released by the court and placed in the custody of a Mrs. Lemmon.
On March 18, 1955, the Court of Common Pleas of Allegheny County found that appellee was 'able to handle all her personal affairs', cancelled her probation and released her from custody. Since that time appellee has used neither alcohol nor drugs and has been in all respects a normal person.
On April 30, 1951, while in Florida, appellee executed two trust agreements and an assignment. [3] Under the first trust agreement, appellee transferred to the Pittsburgh National Bank, as trustee, [Bank], certain securities and United States government bonds and, under the provisions of that trust, appellee is to receive the net income for life and so much of the principal as the Bank, in its sole discretion, may deem necessary to maintain and support her and, upon appellee's death, separate trusts, to terminate under certain conditions, such as attainment of a certain age, etc., were set up for 'each of the issue of the [appellee] living at the [appellee's] death per stirpes.' Under the second trust agreement, appellee transferred to the Bank, in trust, 2055 shares of Washington Oil Company common stock and created therewith three separate trusts for appellee's three children born of her marriage to Richard Hoover; under this trust appellee reserved no interest in either the income or the corpus for herself. Both trusts are irrevocable in nature. Under the assignment, appellee transferred to the Bank her interest in certain oil and gas leaseholds in Elk County, Pennsylvania, to become part of the principal of the first trust.
On August 1, 1960, appellee instituted an equity action in the Court of Common Pleas of Allegheny County against the Bank to set aside both the trust agreements and the assignment upon the grounds that at the time of execution of these instruments she was incompetent and unduly influenced and coerced both by her father, Richard Eastall, and her then husband, Richard Hoover. In this action, appellee's four children, then all minors, were joined and a guardian ad litem appointed for them. The court sustained preliminary objections to appellee's complaint on the grounds (1) of laches and (2) that the complaint insufficiently averred fraud, duress, coercion or undue influence. On appeal to this Court we reversed the order of the court below: Mulholland v. Pittsburgh National Bank, 405 Pa. 268, 174 A.2d 861.
The matter was then heard in the Court of Common Pleas of Allegheny County and that court, after hearing, ultimately concluded that (1) appellee was not guilty of laches, (2) appellee was incompetent at the time she executed the two trust agreements and the assignment, (3) impliedly at least, appellee had been subject to undue influence to induce her to sign these instruments, and (4) at least inferentially, the Bank was not entitled to any compensation for its services. The court set saide the trusts. We are convinced, from our examination of this record, that the court below erred in all four respects.
In passing upon the issues presented upon these appeals, [4] we must begin with reference to our determination of the prior appeal in this matter, a determination, apparently, subject to some misunderstanding on the part of appellee's counsel as well as of the court below.
The posture in which Mulholland, supra, was presented to us was a challenge to the propriety of the action of the Court of Common Pleas of Allegheny County in sustaining preliminary objections to and in dismissing appellee's complaint. On that appeal, we were required to accept as true all well-pleaded facts in appellee's complaint (Necho Coal Co. v. Denise Coal Co., 387 Pa. 567, 568, 128 A.2d 771) and to sustain that complaint, if from an examination of the complaint, it was not clear that appellee had been guilty of laches or had not set forth a good cause of action. Viewed in the light of such requirements, the decisional point of Mulholland, supra, was that it appeared from the facts pleaded in the complaint that laches could not be imputed to appellee because she might have been under a legal disability at the time and that, even though it was not clear from the complaint that fraud, duress, coercion or undue influence had been exerted upon appellee, the complaint was not so defective as to justify its summary dismissal. Critical in our determination of that appeal were the averments in the complaint that on February 4, 1953 and on June 24, 1960, a Florida court had found that appellee had been incompetent since March 30, 1950--thirteen months prior to the execution of the trust agreements and assignment--and our doubt, arising from the pleadings, of the impact on the question of laches of the decree of the Pennsylvania court which found appellee competent on March 18, 1955,--over five years prior to the institution of the equity action.
We, therefore, concluded in Mulholland, supra, that, upon the face of appellee's complaint, a summary dismissal of the complaint should not have been directed and we directed that appellee should have 'her day in court'. Upon that basis, the matter was returned for disposition to the court below.
On these appeals four principal issues are presented: (1) was appellee guilty of laches?; (2) was appellee mentally competent on April 30, 1951, the date upon which the trust agreements and assignment were executed?; (3) was appellee unduly influenced and coerced in the execution of these instruments?; (4) whether the Bank is entitled to any compensation for its services as trustee?
The adjudication of the court below indicates an understanding on the part of the court that by our decision in Mulholland, supra, we had foreclosed any further consideration of the question of laches. That is just not so. In Mulholland, supra, from the pleadings it appeared that, if the Florida court had jurisdiction over appellee on Febraury 4, 1953, when it declared her incompetent, then that order read in connection with the order of the Florida court of June 24, 1960, could be construed to mean that, until five weeks prior to the institution of this equity action, appellee was legally incompetent and the circumstances were such that laches could not be imputed to her. Moreover, in view of the paucity of the facts before us, we could not determine the impact on laches of the finding of appellee's competence by the Pennsylvania court on March 18, 1955. The voluminous record now before us presents an entirely different situation than Mulholland, supra, presented.
The record shows that, in February 1953, the Florida court appointed a committee, composed of two psychiatrists and a layman, to inquire into appellee's alleged incompetency and such committee filed a report stating, inter alia: 'We determine that [appellee] is not incompetent except by reason of chronic inebriacy'. [5] On the basis of that report, as well as the court's personal examination of appellee, the court found that appellee was incompetent 'by reason of drunkeness, excessive use of drugs, chronic inebriacy, impulsive drinking, orgies and occasional violence constituting anti-social psychopathy'...
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