The opinion of the court was delivered by: Seitz
Defendant has filed a motion for reargument. Plaintiffs submitted a letter which amounts to a request for further instructions. This is the decision on both matters. I consider defendant's motion first.
The initial ground is that the court misunderstood the breadth of the relief requested in defendant's counter-petition when it equated it with the relief sought by plaintiffs. The court realized that defendant's prayer was "broader" than plaintiffs', but felt, as the opinion notes, that it was only called upon to decide the controversy which precipitated the plaintiffs' request, viz., whether less than all the executors could make an effective delivery of the legacy. The court did not think it appropriate to rule on the question posed in the counter-petition because to render an opinion thereon which would be meaningful would have required the court to define ministerial and non-ministerial duties of executors in the abstract.
The next ground of defendant's motion is that the court failed to consider his contention that it would be contrary to 30 Del.C. § 1344 to permit delivery of the assets without reserving an amount sufficient to cover contingent tax liabilities. Paragraph (a) of § 1344 provides:
"(a) Any administrator, executor or trustee having in charge or trust any legacies or property for distribution subject to the tax imposed by this chapter, shall deduct the tax therefrom, or if the legacy or property is not money he shall collect a tax thereon upon the appraised value thereof from the legatee or person entitled to such property, and he shall not deliver or be compelled to deliver any specific legacy or property subject to tax to any person until he has collected the tax thereon."
First off, the will provides that the executors are to pay all taxes from the estate and may not collect any thereof from any beneficiary. Thus, we are not here concerned with any tax on property which the executors must collect from the residuary trustees before making delivery. Consequently that aspect of the statute does not preclude delivery. But defendant says that the statute requires the executors to hold back sufficient assets to cover an alleged contingent tax claim. Certainly, as a general matter, an executor may withhold an amount sufficient to cover such a possibility. However, I believe that an executor must make delivery to a legatee who complies with the requirements of 12 Del.C. § 2312. This construction affords protection to the executor and at the same time prevents undue delay in making delivery to beneficiaries.
I therefore conclude that if the trust here involved complies with the provisions of 12 Del.C. § 2312, the executors may not withhold assets to cover an alleged contingent tax claim on the theory that 30 Del.C. § 1344 requires such action.
Finally, defendant attacks the soundness of the court's reasoning in support of its Conclusion that a majority of executors at least may approve the sufficiency of the security required under 12 Del.C. § 2312. He says that the court bottomed its Conclusion on the inference that an "executor who approves the security will show good judgment because it is in his interest to do so". This, he says, does not touch the primary point because all executors are presumably interested in doing the right thing and seeing that all executors are protected.
Admittedly, the area of concern involves an exercise of discretion but assuredly there must be many situations in the settling of estates where a discretionary act can be performed by less than all the executors. A judgment must be made as to whether this particular discretionary act, because of its nature and significance, requires the same unity as is required of co-trustees. One notes a distinction immediately in that the unity of trustee action is presumably for the benefit of the trust. In contrast, if unity is required here, it is to protect an executor against the possibility that his co-executors have not required sufficient security. On balance, I believe the reasoning that a majority will presumably act to inquire sufficient security to protect themselves and consequently all executors, justifies the construction placed upon the statute.
I therefore conclude that defendant's motion for reargument should be denied.
After the court filed its opinion the plaintiffs advised the court in writing that they felt that they could not rely upon compliance with 12 Del.C. § 2312(b) because of ambiguities and uncertainties concerning the meaning and operation of the statute itself. The plaintiffs went on to delineate their specific concerns. The defendant suggests that their communication should be treated as a motion for reargument and denied.
I conclude that plaintiffs' communication should not be treated as a motion for reargument. Rather, I believe plaintiffs seek further instructions to determine what is required of them in order to comply with the statute. Thus, I assume that they intend to comply with the statute as construed, if they reasonably can.
The problems concerning compliance with the statute were not raised in the pleadings or argument and I therefore cannot consider them on the present state of the pleadings. If they are raised in a proper pleading I ...