Turk v. Grossman

• Citation: 6 A.2d 639,176 Md. 644
• Decision Date: 06 June 1939
• Docket Number: 42,43.
• Parties: TURK et al. v. GROSSMAN et al. GROSSMAN et al. v. TURK et al.
• Court: Maryland Court of Appeals

6 A.2d 639

176 Md. 644

TURK et al. v. GROSSMAN et al.

GROSSMAN et al. v. TURK et al.

Nos. 42, 43.

Court of Appeals of Maryland

June 6, 1939

Appeals from Circuit Court of Baltimore City; Samuel K. Dennis Judge.

Suit in equity by Elise A. Grossman and Lloyd E. Mitchell, Inc., a Maryland corporation, against Karl Turk, Sr., individually and as sole remaining executor of the estate of Heinrich Turk, deceased, and others for an accounting for stock claimed to have been pledged by deceased as security for obligations and subsequently purchased by certain defendants and for other relief. From an order overruling defendants' demurrer to the bill and an order overruling plaintiffs' demurrer to a specified portion of defendants' answer, both sides appeal.

Order overruling defendants' demurrer affirmed and order overruling plaintiffs' demurrer reversed and cause remanded for further proceedings.

Where a defendant answers a bill, the answer must reply to those pertinent matters which are alleged to be peculiarly within knowledge of defendant.

Randolph Barton, Jr., and Harvey C. Bickel, both of Baltimore, for Karl Turk et al.

William L. Marbury, Jr., and Boyd B. Graham, both of Baltimore (Marbury, Gosnell & Williams, William L. Rawls, Coady & Farley, and Charles P. Coady, Jr., all of Baltimore, on the brief), for Elise A. Grossman et al.

Argued before BOND, C.J., and OFFUTT, PARKE, SLOAN, MITCHELL SHEHAN, JOHNSON, and DELAPLAINE, JJ.

PARKE Judge.

The questions on this appeal arise on demurrers to pleadings in equity. A bill of complaint was filed in the Circuit Court of Baltimore City by Lloyd E. Mitchell, Incorporated, and Elise A. Grossman, against Karl Turk, Sr., individually and as sole remaining executor of the estate of Heinrich Turk, deceased Margaret M. Turk, wife of Karl Turk, Sr., Herman O. Weinholt and W. Graham Boyce, defendants. By agreement of the parties Thekle Weinholt, wife of the defendant, Herman O.

Weinholt, was made a party defendant as though she had originally been a party defendant, and all the allegations of the bill and its amendment and the subsequent pleadings are to be considered and taken as fully applicable to her as a party defendant and united and uniting therein. The plaintiffs are creditors of Heinrich Turk, a decedent, and they sue in behalf of themselves and all other of his creditors. The defendants filed a combined demurrer and answer. The bill of complaint was later amended by the addition of a paragraph which sets forth similar alleged facts with reference to additional shares of stock of which the plaintiffs were unaware, as well as of the transactions of the defendants with respect to the same, when the original bill was filed. The defendants again demurred and answered, and the plaintiffs demurred to sub-paragraph 5 of the second paragraph of the answer. The matter came before the Chancellor on demurrer, and he, first, overruled the demurrer, to the bill of complaint and, in turn, over-ruled the plaintiffs' demurrer to the specified portion of the answer of defendants. From these rulings both sides have appealed. The two appeals are on the same record and here docketed in the order of the pleadings.

The parties are shown to stand in these relations. Elise A. Grossman is a resident of Baltimore City and the former wife of the decedent, Heinrich Turk, from whom she was divorced in 1925. The other plaintiff is a corporation of Maryland with its principal place of business in Baltimore City. Each of these plaintiffs is a creditor of Heinrich Turk. The defendant, Karl Turk, Sr., is a brother of the decedent, Heinrich Turk, and the husband of Margaret M. Turk. Herman O. Weinholt married the defendant, Thekle Winholt, the sister of Heinrich Turk and of Karl Turk, Sr. The other defendant, W. Graham Boyce, is the chairman of the board of directors and the secretary and treasurer of The Porcelain & Manufacturing Company of Baltimore, a corporation of Maryland which is engaged in the manufacture of porcelain enamel. The natural and corporate defendants live and have their residences in Baltimore City with the single exception of Margaret M. Turk, who lives in Baltimore County.

The pleadings and exhibits are voluminous, and their contents will be summarized so as sufficiently to present the questions raised by the demurrers. Heinrich Turk died testate in Baltimore County on November 7, 1934. He named as his executors his second wife, Eileen Turk and his brother Karl Turk, Sr., a defendant. The will was duly admitted to probate in Baltimore County on December 20, 1934, and letters testamentary were granted on that day to his executors, who gave bond in the substantial sum of $1,000.

The plaintiff, Elise A. Grossman, filed on June 5, 1935, in the Orphans' Court of Baltimore County a petition whereby she sought to establish her claim against the estate by virtue of a contract, which had been made on October 14, 1925, between her and the testator. As a result of an agreement entered into by the claimant and the personal representatives of the testator, she withdrew the petition on December 17, 1936, and two days later filed her claim against the estate of the testator in the principal amount of $25,500. With the acquiescence of the personal representatives, the Orphans' Court of Baltimore County duly passed this account. The plaintiff corporation filed its claim in the sum of $2,058.10 on October 20, 1936, and the same day it was likewise passed.

An inventory was filed by the executors on May 11, 1935. The total value of the automobile ($300) and of certain stocks ($5,504) returned was $5,804. All the shares of stock were pledged as collateral for two loans of the testator, and their appraised value was, in each case, less than the principal amount of each loan. One of the notes was to Herman O. Weinholt for $5,000 and accrued interest, and the collateral on the note was 2,320 shares of the no par common stock of the Porcelain Enamel & Manufacturing Company (hereinafter to be called the Porcelain Company), appraised at $2 a share, and eight shares of $100 par value old stock of the Porcelain Company, appraised at eight dollars a share. The other note of $3,900 and accrued interest was held by the Union Trust Company of Maryland and for its payment were pledged 100 shares of $100 par value of old stock of the Porcelain Company which was, also, appraised at eight dollars a share. Beginning with January 8, 1935, and ending with December 19, 1936, the aggregate of all claims passed against the estate by the Orphans' Court was $49,795.21. A claim of the Porcelain Company for $9,265 was withdrawn on October 28, 1936, and this left the sum of the proved claims $40,530.21, but in this total the note of $5,000 and accrued interest which was held by defendant Herman O. Weinholt was not included, as it had not been passed against the estate.

No further inventory nor list of debts was filed. On January 5, 1937, the executors presented what purported to be the first and final account of the estate of their testator. According to the charges and allowances shown by the ex parte account the defendant Herman O. Weinholt disposed of 2,320 shares of the no par stock of the Porcelain Company at $1,988.90 in excess of its appraised value; and the 8 shares of the old stock of the Porcelain Company at $78.30 in excess of its appraised value. The appraised value of all the goods and chattels ($5,804.00) with these gains ($2,067.20) and $297.09 collected on an account made the total estate, which the executors accounted for, the sum of $8,168.29.

The executors were allowed $5,150 which Herman O. Weinholt had retained out of the proceeds of the pledged stock to pay his note. There were, also, allowed $588.60 which the Union Trust Company had received on its sale of the 100 shares of old stock of the Porcelain Company and the further sum of $211.40 on account of the loss on the sale of this stock below its appraised value. These allowances, with other disbursements, fees, expenses and commissions, made a total of $7,235.12 and left a residue for distribution among creditors of $933.17. The dividend distributed among the creditors was at the percentage of .023363. So, on its claim of $2,058.10 the plaintiff, Lloyd E. Mitchell, Inc., received $48.08; and the plaintiff, Elise A. Grossman, on her claim of $25,500 without interest, got $595.76.

The account was verified by the oaths of the two executors, and the Orphans' Court passed an order approving the account on the day it was filed.

From that day no further accounting has been made, and no other distribution among creditors has been had, but, after the plaintiff, Elise A. Grossman, had given notice of her intention to begin the pending suit, Karl Turk, Sr., one of the executors of the estate of Heinrich Turk, notified, in writing, on April 11, 1938, the attorney of Elise Grossman that her claim was thereby disputed. The other representative, Eileen Turk, filed in March, 1938, a petition in which she alleged that she and Karl Turk, Sr., as executors of Heinrich Turk, deceased, had stated a final account on January 5, 1937, in which was given a full and particular account of all their receipts and disbursements and that the Orphans' Court had passed the account, and that since then no assets of any kind had come into the hands of the petitioner as such executor. The petitioner further recited that she was informed that one claiming to be an unpaid creditor of the testator intended to call upon the executors to institute suit against relatives of the decedent for the purpose of questioning the validity of the sale of certain assets in which the decedent had an interest; and that, without desiring to prejudice the rights of the claimants in the matter, the...