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Hayward v. Green

Supreme Court of Delaware

May 14, 1952


Page 807

Stewart Lynch and Florence E. Freeman, of Wilmington, for plaintiffs-below, appellant.

P. Warren Green, of Wilmington, for defendant-below, appellee.

SOUTHERLAND, Chief Justice, and WOLCOTT and TUNNELL, Justices, sitting.

TUNNELL, Justice.

Plaintiffs and defendant are three out of a total of ten brothers and sisters. Differences over the settlement of their father's estate [1] resulted eventually in this litigation.

When the father died in 1943, he left no personal estate; his only asset was a possible equity in a farm of 167 acres near Newark, Delaware. The existence of such equity, and the extent of it, if there was one at the time of the father's death, are conjectural. The children, however, hoped that upon holding the farm for a time there would be a sufficient appreciation in its value to enable them to dispose of the farm, discharge in full the debts of the estate,[32 Del.Ch. 579] and retain some substantial equity for distribution among themselves. Such a plan was ultimately adopted, and to that end an absolute fee simple title to the farm was deeded to the defendant. One of the sisters and a niece, who was the only child of a deceased sister, gave their respective one-tenth interests to the defendant outright, but the other seven, who included plaintiffs, conveyed their rights to defendant to be held for their benefit.

It was a term of the oral agreement appointing defendant agent for execution of this plan that on eventual settlement defendant should be reimbursed for whatever monies she had laid out for the common benefit, but the matter of interest upon those disbursements was not mentioned. Thereupon, defendant, out of her own funds, paid debts against the estate amounting to $3,629.47. She also assumed the mortgage, which, with interest, then amounted to $5,300. The debts which the defendant paid were liens upon the estate, and until they were paid off by defendant, interest was accruing upon them. From 1943, when the conveyance was made,

Page 808

Then, in 1948, defendant started to sell the farm for a price of three or four times its estimated worth at the time of the father's death. She let it be known, however, that she claimed to own the farm absolutely, and that the proposed sale, therefore, would be for her own account.

Plaintiffs promptly came into Chancery to enjoin the sale and to impress a trust upon the property. The Vice-Chancellor, [2] after hearing the testimony, found the above to be facts and concluded that title had been conveyed to defendant for seventenths of the farm on faith that she would hold that fraction of it for the benefit of seven of the brothers and sisters. Thereupon, the Court of Chancery[32 Del.Ch. 580] enjoined the sale and declared a trust to be impressed upon the property in accordance with the above oral agreement, appointed defendant to serve as trustee, and ordered her to proceed to dispose of the farm and then to account for all items of income and expense connected with the farm since her acquisition of the legal title to the property.

The cause below, therefore, went forward in two stages. Decision on the merits impressing the trust and ordering the accounting was embodied in the Vice-Chancellor's opinion, 30 Del.Ch. 392, 61 A.2d 692, of the 20th day of October, 1948, and put into force by his judgment of May 24th, 1949. The second stage, dealing with the accounting, was decided by the Chancellor's letter opinion of the 20th day of November, 1951, and put into force by the judgment of December 19th, 1951.

The first opinion had mentioned that defendant would be entitled to interest on the monies she had expended to liquidate the debts of the estate. The judgment entered on that opinion, however, did not make any reference to interest, unless it did so indirectly. These are matters which we shall later be required to consider in some detail.

After this judgment of May 24th, 1951, the defendant proceeded to sell the farm, settle with the purchaser, and prepare and present her accounting. Numerous exceptions were filed to the accounting of the defendant as trustee, and testimony was taken thereon. Some of the exceptions were sustained, and some were overruled. In the account as ultimately approved, however, were the following two items, being the items with which this appeal is concerned: (1), an allowance to defendant of interest in the sum of $1,751.21 on the monies laid out and expended by her on the 15th day of November, 1943, in the payment of her father's debts, and (2), an allowance to defendant of the sum of $1,500 for services rendered to her as trustee by P. Warren Green, her attorney.

Plaintiffs appealed to this court on the 3rd day of January, 1952.

[32 Del.Ch. 581] Defendant promptly moved to dismiss. In support of the motion, three grounds were urged, two of which applied only to the item of interest, and one of which was directed both to interest and to the legal fee.

The first contention to be considered is that as to the interest item the appeal was taken too late, that is, after the expiration of the six months allowed by our constitution. [3] It is apparent that the appeal was taken more than six months after the first judgment and less than six months after the second, so the question to be decided, therefore, is whether this appeal is from the first judgment or the second one.

The defendant's theory, of course, is that the instant appeal is from the judgment of May 24th, 1949. In support of her position, defendant points to this sentence in the opinion, 30 Del.Ch. 392, 61 A.2d 692, 699, of October 20th, 1948:

'However, these interests will be made subject to appropriate instruments entitling the defendant to payment in full with interest for all payments

Page 809

made on behalf of the estate of George Green, plus other disbursements which benefited the interests of all.'

No language in the judgment entered on that opinion directly mentions or touches upon interest in any way, but defendant contends that the sentence above quoted from the opinion was, nevertheless, incorporated into the judgment by the following reference:

'Ordered, adjudged and decreed that Ruth C. Green be and she is hereby decreed a Trustee of the said Green Farm at Newark, Delaware, upon the trust to hold title thereto for the complainants and the others mentioned in the Opinion, and according to the terms of that Opinion * * *.'

We do not agree with defendant. The judgment of May 24th simply subjected the Green farm to the trust, defined the general terms of the trust, and directed the [32 Del.Ch. 582] trustee at a later date to give an accounting as to all matters of money. Thus, the language which defendant quotes from the judgment and seeks to emphasize, and which we have above quoted, cannot be applicable to this narrow question of interest, but has reference to the broad question of the character of the ownership of the farm.

Moreover, this language quoted from the judgment as the ground for the motion to dismiss deals with something which the defendant is expected to do, i. e., to hold and manage the farm for the benefit of others. If any interest is to be paid, it is something to be done by plaintiffs. To read into this sentence a direction that the plaintiffs shall pay interest would be a distortion of its meaning. If the language in the opinion of October 20th, 1948, dealing with the question of interest had been in the judgment, a different problem would be presented, but we fail to find a single word in the judgment referring, either expressly or by inference, to the subject of interest.

Next, the defendant argues that the plaintiffs cannot take an appeal as to interest because, prior to taking the appeal, they accepted money under other provisions of the same judgment which had allowed the interest. Language apparently supporting the defendant's theory has been borrowed from decisions involving sets of facts where the taking of money under a judgment and subsequently appealing from it were inconsistent positions. These are cases where the judgment involved was indivisible, or where, even though the judgment was separable into components, having taken money under the judgment amounted to an estoppel. Such vital factors, however, are not even alleged to be present here. If plaintiffs should prevail, defendant will owe them more than she has yet paid. On the other hand, if defendant prevails, she will simply not owe any more than the sums specified in the accounting in Chancery. Defendant's rights will not be prejudiced in either event. No inconsistency whatever is involved, and there is no force to defendant's contention on the point. [32 Del.Ch. 583] 2 Am. Jur., Sec. 215; 4 C.J.S., Appeal and Error, §§ 215, 216, pp. 415-419.

Finally, defendant argues that since the payment of interest and the allowance of counsel fees are both matters of judicial discretion, neither question is appealable. Defendant has not done justice to the breadth of the contentions of plaintiffs. Plaintiffs contend, first, that the Vice-Chancellor committed error in law in concluding that he had any discretion to award either interest or counsel fees, and, secondly, that if the Vice-Chancellor is found, over their opposition, to have had such a discretionary power, he should, nevertheless, be held to have abused his discretion under the facts of this case. Clearly an appeal lies for ...

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