Theisen v. Hoey

• Decision Date: 15 January 1947
• Citation: 29 Del.Ch. 365,51 A.2d 61
• Court: Court of Chancery of Delaware
• Parties: VINCENT A. THEISEN, Administrator of the Estate of Alice Boyle Hoey, deceased, v. EDWARD F. HOEY, ANNE M. HOEY LEARY, formerly Anne M. Hoey, and MASSACHUSETTS BONDING AND INSURANCE COMPANY, a corporation of the State of Massachusetts

51 A.2d 61

29 Del.Ch. 365

VINCENT A. THEISEN, Administrator of the Estate of Alice Boyle Hoey, deceased, v. EDWARD F. HOEY, ANNE M. HOEY LEARY, formerly Anne M. Hoey, and MASSACHUSETTS BONDING AND INSURANCE COMPANY, a corporation of the State of Massachusetts

Court of Chancery of Delaware, New Castle

January 15, 1947

William Prickett, for complainant.

Stewart Lynch, for defendants.

OPINION

HARRINGTON, Chancellor

The bill alleges and the demurrer admits: (1) that Alice Boyle Hoey died intestate, a resident of the City of Wilmington, in 1939; (2) that at the time of her death she was seized of a certain parcel of real property on Vandever Avenue and LaMotte Street, in the City of Wilmington, with buildings thereon erected, in which she had operated a laundry for some years prior thereto; (3) that on July 26, 1939 letters of administration were granted to the individual defendants Edwin F. Hoey and Anne M. Hoey Leary, by the Register of Wills, for New Castle County, and they gave bond in the amount of $ 45,000, with Massachusetts Bonding and Insurance Company as surety thereon; (4) that on the death of the intestate "machinery, automobile trucks, equipment and other personal property, used by the deceased in the laundry business, formed an important part of the assets of the deceased's estate. Such personal property came into the hands of Hoey and Leary as administrators, as aforesaid"; (5) that "from about July 26, 1939 until about August 17, 1943, said Hoey and Leary, purporting to act as administrators, as aforesaid, without any order from the Register of Wills aforesaid, or from any other court having jurisdiction authorizing them to do so, operated said laundry, using said buildings and personal property which came into their hands as such administrators for that purpose"; (6) that on August 17, 1943, the defendants "Hoey and Leary were removed as administrators, and the complainant was appointed administrator of the estate of the deceased. Thereafter, complainant qualified and is now acting as such administrator"; (7) that "said Hoey and Leary have not filed an account of their administration on the estate of the deceased, but have neglected and refused to do so, notwithstanding orders of said Register to file such account"; (8) that "complainant is advised, believes and avers that there are debts of the deceased remaining unpaid and that said estate is insolvent in that there are not sufficient assets to pay the debts of the deceased."

The relief sought appears in the facts.

The questions raised by the demurrer of the individual defendants are (1) whether this court can entertain a bill for an accounting against the former and removed administrators of Alice Boyle Hoey, deceased, and (2) whether, in any event, an administrator de bonis non can file the bill, particularly when the estate is insolvent.

The demurrer of the Massachusetts Bonding and Insurance Company raises the same questions. It also questions whether it can be joined as a defendant in the bill for an accounting with the prior administrators, the principals in the administration bond, or whether the complainant's only remedy is by an action at law.

Executors or administrators are required to collect the assets, pay the debts of the deceased, and distribute any balance in hand to the persons entitled. It is neither a part of their duties, nor within their usual powers, to operate a business which has been conducted by the decedent during her lifetime. If this is done, the interested parties may, ordinarily, elect either to demand an account of the profits realized, if any, or a complete return of the assets used with interest; if there are losses, the administrators may be held accountable therefor. 24 C.J. 55; see also 33 C.J.S., Executors and Administrators , § 189; Gilligan v. Daly, 79 N.J.Eq. 36, 80 A. 994; In re McGovern, Sur., 118 N.Y.S. 378. But the question is whether the rights of the parties can be determined in this court by a bill for an accounting. Independent of any other reasons for jurisdiction of this court in complicated mutual accounting cases (see Davis v. Davis, 1 Del.Ch. 256; Illinois Finance v. Interstate Royal Credit Ass'n., 11 Del.Ch. 349, 101 A. 870), it is not denied that the English Court of Chancery had at least concurrent jurisdiction over the administration and settlement of decedents' estates at the time of our separation from that country, as the powers of the Ecclesiastical Court were quite limited. Glanding v. Industrial Trust Co., 28 Del. Ch. 125, 45 A.2d 553; 1 Pomeroy, Eq.Jur., (5th Ed.) § 346; 4 Pomeroy Eq.Jur., (5th Ed.) §§ 1127-1129, 1153. The jurisdiction existed whether the decedent died testate or intestate (4 Pomeroy, supra, § 1155), and was usually based on the fiduciary relation existing between his personal representatives and creditors, legatees or other persons entitled to share in the estate. 1 Pomeroy, supra, § 346; 4 Pomeroy, supra, §§ 1127, 1155; In re Ortiz' Est., 26 Del.Ch. 240, 27 A.2d 368, 373. The right of discovery may be an important incident in accounting cases in equity, but it is not the real basis of the jurisdiction. Adams Equity, 74 Law Libr. *p. 220; 1 Pomeroy, Eq.Jur., supra, § 191. It is not denied that, in most respects, this court has substantially the same powers the old English Court of Chancery had in 1776. § 10, Art. IV, Const. of 1897; § 4637, Rev. Code 1935; Glanding v. Industrial Trust Co., supra. The proviso in Section 4637 of the Code is merely declaratory of the ancient equity rule with respect to jurisdiction. Glanding v. Industrial Trust Co., supra. When a court of equity once has jurisdiction, the mere fact that a statute gives somewhat similar powers to another tribunal seldom affects its original jurisdiction. Glanding v. Industrial Trust Co., supra; State v. Wilmington Bridge Co., 2 Del.Ch. 58; Fox v. Wharton, 5 Del.Ch. 200; Walker v. Caldwell, 8 Del.Ch. 91, 67 A. 1085; 1 Pom.Eq.Jur., supra, §§ 176, 182; 4 Pom.Eq.Jur., supra , § 1153. Whether under such circumstances equity jurisdiction is abrogated is a question of intent, but statutory provisions of that nature are construed strictly and to have that effect must usually contain what amounts to express prohibitory and negative language, or affirmative language conferring exclusive jurisdiction on some other court, Id.; 1 Pomeroy, supra, § 281. The defendants claim that this court has never had the power to compel executors and administrators to account as the state constitutions have always given exclusive jurisdiction elsewhere. But other courts of this State had broad equity powers before the Court of Chancery was created as a separate tribunal in 1792. Glanding v. Industrial Trust Co., supra.

The Register of Wills has been a constitutional officer since the Constitution of 1792, § 17, Art. VI, and that office is provided for by Section 33, Article IV of the Constitution of 1897. See Wilmington Trust Co. v. Baldwin, 8 W. W. Harr. (38 Del.) 595, 195 A. 287.

Section 34 of Article IV of the Constitution of 1897 also provides:

"An executor or administrator shall file every account with the Register of Wills for the county, who shall, as soon as conveniently may be, carefully examine the particulars with the proofs thereof, in the presence of such executor or administrator, and shall adjust and settle the same according to the right of the matter and the law of the land; which account so settled shall remain in his office for inspection; and the executor, or administrator, shall within three months after such settlement give notice in writing to all persons entitled to shares of the estate, or to their guardians, respectively, if residing within the State that the account is lodged in the said office for inspection.

"Exceptions may be made by persons concerned to both sides of every such account, either denying the justice of the allowances made to the accountant or alleging further charges against him; and the exception shall be heard in the Orphans' Court for the county; and thereupon the account shall be adjusted and settled according to the right of the matter and law of the land."

That provision also appeared in the Constitution of 1792, Art. VI, § 16, but the phrase requiring an executor or administrator to file "Every account with the Register of Wills for the county" then included guardians.

In considering the question of jurisdiction, it is also pertinent to consider certain supplementary statutory provisions. Ordinarily, an executor or administrator has one year from the date of his letters within which to settle an estate and pass his final account. § 3852, Rev Code 1935. In any event, annual accounts are contemplated unless the Register of Wills for sufficient cause shall extend the time, or shall excuse an accounting in any year. § 3843, Rev. Code 1935. At least since 1806, the Register has been authorized to initiate contempt proceedings to compel executors to comply with their statutory duty to pass accounts. § 24, Chapt. 21, Vol. 4, Laws of Del.; Revised Code 1829, p. 227, § 15; § 3843, Rev. Code 1935; Wilmington Trust Co. v. Baldwin, supra. The Act of 1806, § 24, Chapt. 21, Vol. 4, Laws of Del., also applied to guardians. For some purposes, the Register of Wills clearly has judicial functions, but in settling and adjusting accounts of executors and administrators it seems that he is a mere accounting or auditing officer. The old Court of Errors and Appeals so held as early as 1842, and this court is bound by that decision. Robinson v. Robinsons' Adm'r., 3 Harr. 433; see also Wilmington Trust Co. v. Baldwin, supra; Peckard v. Price, 5 Del.Ch. 239; Bodziak v. Theisen, Adm'r., 4 Terry (43 Del.) 487, 50 A.2d 409. The justice of all allowances made to the accountants by...