Counsel for appellant in their argument | son of the testator. This contention was well have brought to our notice some English cas- disposed of by the auditing judge, who rees, which they urge tend to support an excep- fused to apply the doctrine of laches, and tion to the application of the general rule as said: "Laches implies failure to act upon to unlawful accumulations. But the deci- full knowledge of all the facts. The present sions in Harbin v. Masterman, L. R. (1894) claimant, a grandchild of testator, is entitled 2 Ch. 184, and Wharton v. Masterman, L. R. to the surplus income arising from and after (1895), Appeal Cases, 186, as appears from the February 4, 1892, the date of his mother's opinions in those cases, are based expressly death. He was not heretofore bound, so far upon the fact that by the terms of the will as the facts appear, to petition the court to under construction the residuary legatees construe the will; the very fact that the trustook a vested estate in both the principal and tee did not notify him of the audit would the surplus income of the trust estate, and seem to be conclusive that it considered he that no one else had the least interest in or had no claim or rights in the premises, and claim upon such income. And counsel for his knowledge of a surplus would necessarily appellants, in their argument here, admit come from the trustee, which was in exclusquarely that these English cases do not ap- sive control of the residuary estate. The ply here unless the will in the present case trustee filed no accounts from time to time, gives to the residuary legatees vested rights. as certain of the annuitants died. It was That it does not do so we have already not compelled to do so. Now it files its first pointed out. Under the English act, it has account, and it seems to the auditing judge been held that where income of residue exceedingly technical to hold the next of kin is directed to be accumulated for a period bound by what his mother failed to do in beyond that allowed by the act, the effect of May, 1875, at which time the executor's acthe statute is that the income, during the count was confirmed nisi; especially so, asperiod for which accumulation is unlawful, suming the old practice to be similar to the goes to the next of kin as undisposed of. See present, in view of the fact that, unless there Weatherall v. Thornburgh, L. R. 8 Ch. D. 261. was then an accumulation shown to be such In a later case (In re Travis; Frost v. Great- in the account as filed, the court would have orex, L. R. [1900], 2 Ch. 541) the rule of refused either to consider or to determine Weatherall v. Thornburgh was followed, and the question, for the very simple reason that it was held that, where there is an annuity there was then no evidence of a fund for imgiven by will, and the surplus income direct- mediate distribution." ed to be accumulated until the death of the annuitants, the accumulations accruing after the expiration of 21 years go under the intestate law, and not to the residuary legatee. It was also held that Weatherall v. Thornburgh is not inconsistent with and is not overruled by Wharton v. Masterman. In the case of Talbot v. Jevers, L. R. 20 Eq. 255, a testator directed the payment of several annuities out of his residuary estate, and upon the death of the last surviving annuitant directed that both principal and accumulations of income should be applied for the benefit of testator's nephew and his heirs. It was held that, as to the income accruing after the expiration of 21 years from the death of testator, there was an intestacy. This case bears a close resemblance in its facts, and the provisions of the will construed, to the case at bar. It is cited, and followed, together with Weatherall v. Thornburgh, L. R. 8 Ch. D. 261, by Judge Penrose, in Mitcheson's Est., 11 Wkly. Notes Cas. 547. It is further suggested by counsel for appellants that the right to the accumulations was settled by the confirmation of the executor's account, filed in 1875. But it does not appear that any question as to unlawful accumulations was then raised or passed upon, and this question cannot therefore fairly be said to be res adjudicata. Nor do we see any merit in the suggestion that the doctrine of laches should be applied as against the grand The court below reached the conclusion that the surplus income accumulated during the forbidden period passed, under the intestate laws, to the daughter of the testator, his sole next of kin, and that by reason of the length of time which has elapsed since her death, payment of her debts and the settlement of her estate is to be presumed, so that distribution may properly be made to the person claiming through her. We think this disposition of the fund entirely correct. The appeal is dismissed, and the decree of the orphans' court is affirmed. In re FREEMAN'S ESTATE. (Supreme Court of Pennsylvania. 1910.) (227 Pa. 154) (No. 1.) Feb. 14, 1. WILLS (§ 865*) - CONSTRUCTION PARTIAL. INTESTACY-REMAINDER UNDISPOsed of. Testator gave all his estate to his wife, to use the same and the net income during her natural life without any gift over. Held, that the widow's personal representative on her death was entitled to one-third of the husband's entire personal estate absolutely. [Ed. Note.-For other cases, see Wills, Cent. Dig. §§ 2179, 2188, 2193, 2200, 2201; Dec. Dig. § 865.*] 2. WILLS (§ 865*)—REMAINDER UNDISPOSED OF -RIGHTS OF WIDOW-WAIVER. and personal estate, to use the same and the Where testator gave his wife all his real net income during her life without any gift over. she had the right to accept her life estate in the For other cases see same topic and section NUMBER in Dec. & Am. Digs. 1907 to date, & Reporter Indexes home without renouncing her right under the intestate law to such of the property as was not disposed of by will; and the fact that, at the request of her children, she had securities placed in her name as life tenant will not justify a finding that she had construed the will so as to give her merely a life estate. [Ed. Note. For other cases, see Wills, Cent. Dig. § 2199; Dec. Dig. § 865.*] 3. DEATH (§ 2*)—PRESUMPTION-ABSENCE. Where a person leaves his home for temporary purposes, and is not heard of or known to be living for more than seven years, he is presumed to be dead. [Ed. Note. For other cases, see Death, Cent. Dig. § 2; Dec. Dig. § 2.*] 4. DEATH (§ 6*)—PRESUMPTIONS-SURvivor. Where the son of a decedent was absent and unheard of for more than seven years after his father's death, but was heard of about four years before his death, a finding that the son survived the father is justified. [Ed. Note.-For other cases, see Death, Cent. Dig. § 9; Dec. Dig. § 6.*] Appeal from Orphans' Court, Philadelphia County. In the Matter of the Estate of Charles D. Freeman. From a decree dismissing exceptions to adjudication, Anna Dimond Freeman appeals. Affirmed. See, also, 75 Atl. 1066. The following facts were stated by Anderson, J., the auditing judge: "Decedent died May 1, 1891, having first made and published his last will and testament, by which he bequeathed his estate to his wife for life (see Freeman's Est., 16 Pa. Dist. R. 873), and appointed her executrix thereof, but made no provision as to what was to become of his estate after her death, and it therefore passes under the intestate laws; the widow having died June 26, 1906. "Testator left surviving his widow, S. Augusta Freeman, and five children, Isobel F. Frost, Marion F. Wells, Augusta F. Howes, Henry B. Freeman, who has since died, and Canfield Darwin Freeman. The question was raised at the audit as to whether his son Canfield Darwin Freeman survived him. Testimony of the daughters of the decedent was produced, showing that the son left the city about 1883, having been last heard of three or fours years later. Against this testimony was produced a Supreme Court paper book in the Estate of Henry G. Freeman, 181 Pa. 405 [37 Atl. 591, 59 Am. St. Rep. 659], which was a proceeding under the Price act to authorize the trustee in the estate of Henry G. Freeman, father of the decedent, to execute a lease of certain real estate, which paper book contained an affidavit by the widow and children of the present decedent (including those who now assert they knew nothing of the death of Canfield Darwin Freeman, and have heard of him three or four years after his departure), in which they stated that they were the only heirs of this decedent. The burden being upon the parties alleging the death of the son in the lifetime of the father, either to produce evidence of his death, or facts which show a presumption of death, and the evidence being that the son had been heard of in less than seven years prior to the death of the father, the auditing judge is unable to find. either that the son was dead at the death of his father, or that a presumption had arisen to that effect. It will be necessary, therefore, to distribute the estate to the persons entitled under the intestate law, to wit, S. Augusta Freeman, widow (see Reed's Est., 82 Pa. 428; Carmen's Est., 11 Wkly. Notes Cas. 95; Grim's App., 109 Pa. 391 [1 Atl. 212]; Bell's Estate, 147 Pa. 389 [23 Atl. 577]), the children now living, and the estates of those deceased, including the son about whose death the controversy arose (Esterly's App., 109 Pa. 222; Sherwood's Est., 206 Pa. 465 [56 Atl. 20])." On exceptions to the adjudication, Ashman, J., modified the conclusion of the auditing judge as to the distribution of the estate of the son last referred to in the adjudication as follows: "Ordinarily the share of Darwin Freeman would be payable to an administrator of his estate. Under existing circumstances it will be distributed directly to those entitled as by way of intestacy. The distribution directed by the auditing judge is to this extent modified, and the share of Darwin is awarded to the estate of his mother, the widow of the testator; security being first required to protect the possible interest of the missing son or his legal representatives. "The exceptions are dismissed, and the adjudication as modified is confirmed." Argued before FELL, C. J., and BROWN, MESTREZAT, POTTER, ELKIN, STEWART, and MOSCHZISKER, JJ. John I. Rogers and J. B. Colahan, 3d, for appellant. Henry Budd, Walter C. Blakely, and A. S. L. Shields, for appellees Lukens, Frost, and Howes. Robert D. Maxwell, for appellees Tatwell and Smith. "I MOSCHZISKER, J. The testator, Charles D. Freeman, died May 1, 1891, leaving a will wherein he provided as follows: give and devise and bequeath all my real and personal estate to my wife to take and use the same and the net income thereof during all the term of her natural life and without giving security as life tenant thereof." He left him surviving a widow, S. Augusta Freeman, and five children, Henry B. Freeman, Isobel F. Frost, Marion F. Wells (now Lukens), Augusta F. Richardson (now Howes), and Canfield Darwin Freeman. The widow enjoyed the income of the entire estate until her death on June 26, 1906. In 1905 the widow at the request of her children, surrendered the certificates of the securities in her husband's estate, and obtain ed new ones in her own name as "life tenant." Henry B. Freeman, one of the sons, died in the lifetime of his mother, leaving a widow. In June, 1908, the personal representatives of the decedent filed their account, showing a balance for distribution. This balance was awarded, one-third of the principal to the estate of the widow, and the remainder in equal shares to Isobel F. Frost, Marion F. Wells, Augusta F. Howes, the estate of Henry B. Freeman, deceased, and to Canfield Darwin Freeman, "if living, and to his personal representatives if deceased." Exceptions were filed, and it was contended that under the evidence produced it should have been found as a fact that Canfield Darwin Freeman predeceased his father, and that it should have been decided as a matter of law that the widow, was restricted to a life interest, and her estate was not now entitled to share in the distribution. The auditing judge found as a fact that Canfield Darwin Freeman left the city of Philadelphia about 1883, and had been last heard from three or four years later, stating: "The burden being upon the parties alleging the death of the son in the lifetime of the father either to produce evidence of his death, or facts which show a presumption of death, and the evidence being that the son had been heard of in less than seven years prior to the death of the father, the auditing judge is unable to find, either that the son was dead at the death of his father, or that a presumption had arisen to that effect." When the matter came before the court in banc the distribution was affirmed, excepting that the share of Canfield Darwin Freeman was awarded to the estate of his mother; the court stating: "Ordinarily the share of Darwin Freeman would be paid to an administrator of his estate. Under existing circumstances it will be distributed directly to those entitled as by way of intestacy. The distribution directed by the auditing judge is to this extent modified, and the share of Darwin awarded to the estate of his mother, the widow of the testator; security being first required to protect the possible interest of the missing son or his legal representatives." While the learned judge who last spoke for the orphans' court affirmed the distribution as awarded by the auditing judge, he arrived by a different path at the conclusion that Canfield Darwin Freeman, or his estate, was entitled to a distributive share, and in so doing he criticised the credibility of certain of the witnesses who had testified that this son had been last heard of within less than seven years prior to the death of his father; but he did not modify or set aside the findings of fact to that effect made by the auditing judge. Exceptions that "The learned court erred in finding that the son Canfield Darwin Freeman had left the city about 1883, having been last heard of three or four years later," and, "The learned court erred in not finding that the son Canfield Darwin Freeman was dead at the date of the death of the decedent, to wit, May 1, 1891," were dismissed, thereby affirming the findings of the auditing judge. These findings not having been changed by the court below, and an examination of the evidence failing to show any manifest error therein, we must take it as a fact that Canfield Darwin Freeman survived his father. The rule is, where a person leaves his home and place of residence for temporary purposes, and is not seen, heard of, or known to be living for the term of seven years thereafter, at the end of that time he is presumed to be dead. Burr v. Sim, 4 Whart. 150, 33 Am. Dec. 50; Bradley v. Bradley, 4 Whart. 173; McCausland's Est., 213 Pa. 189, 62 Atl. 780, 110 Am. St. Rep. 540. The appellant contends that the learned judge below fell into error by a misstatement of this rule. It is sufficient to say as to this that it was but harmless error, as it did not change or affect the distribution under review. On the question of the share awarded to the estate of the widow. The decedent disposed of his property for the life of his wife, without any disposition over, thus leaving an intestacy after the life estate. The property vested by virtue of the intestate law subject to the life estate given by the will, one-third in the widow absolutely, and the remaining two-thirds in the children. The widow had the right to accept and enjoy her life interest in the whole without giving up or renouncing her right under the intestate law to such of the property as was not disposed of by the will. Reed's Est., 82 Pa. 428; Carman's App., 2 Penny. 332. Her right vested immediately upon the death of her husband, and she could, if she so desired, have had set aside for her absolutely one-third of the personal property. The fact that she did not see fit to do so will not bar her personal representatives from insisting upon this right for the benefit of her estate. But the appellants contend that the widow and the others in interest have been acting upon a different construction of this will, and they are now entitled to the protection of the rule, "where a will has two possible constructions, and the parties have acted upon one, a court should not depart therefrom." The only circumstances that give a semblance of justification to this contention are: First, the fact that the mother did not during her life formally set aside for her separate use one-third of the personal assets of the decedent's estate; and, next, that at the request of some of her children she had the securities placed in her name as "life tenant." These facts, when taken into consideration with their surroundings, do not justify a finding that a construction restricting the widow to her life estate had been widow died on June 26, 1906. Administration d. b. n. c. t. a. was taken out on the estate of Charles D. Freeman after his widow's death. The administratrices filed an account, which was confirmed absolutely on January 16, 1909. Between the date of the death of the widow and the date of the audit, May 15, 1908, a large amount of income had accrued. The court distributed one-third of the principal to the executors of the widow, but awarded all of the income to the children of the decedent. Exceptions to the adjudication were dismissed by the court. put upon the will by the persons in interest. | income thereof during all the term of her naThe evidence indicates that the mother's ac- tural life," without any gift over. The tions in relation to these assets were forced upon her by the attitude of her children; and it appears that she was told by her son Henry, who acted as her legal adviser, that she had no right to sell any of the assets. Although incidentally referred to, this matter was not passed upon in Freeman's Estate, 220 Pa. 343, 69 Atl. 816; the question was not then before us, and we did not decide the extent and the measure of the estate of the children, or that the widow did not share in that part of the decedent's estate as to which he died intestate; the only point determined was that the widow did not have an absolute interest in the whole of the testator's property. In an opinion this day filed in another appeal in this estate we decide that the personal representatives of the widow are entitled to certain accumulations of income, which were awarded by the court below to the children, and for that reason the decree in its entirety cannot be affirmed. On the questions raised in the present appeal as to the right of the son Canfield Darwin Freeman or his estate, and as to the right of the estate of the widow to the awards made to them, respectively, we find no reversible error. The assignments of error are overruled, and to this extent the decree is affirmed. Testator gave his wife all his real and personal estate, to use the same and the net income during her natural life, without any gift over. Held, that the widow's personal representative on her death was entitled to one-third of the entire personal estate absolutely, and all of the accumulations of the income from such one-third from the death of the widow to the date of distribution. [Ed. Note.-For other cases, see Wills, Cent. Dig. 2197; Dec. Dig. § 865.*] Appeal from Orphans' Court, Philadelphia County. In the Matter of the Estate of Charles D. Freeman. From a decree dismissing exceptions to adjudication, Henry Tatnall and J. Ernest Smith, executors of S. Augusta Freeman, appeal. Reversed. From the record it appeared that Charles D. Freeman died on May 1, 1891, leaving a will, by which he gave to his wife, S. Augustå Freeman, all of his real and personal estate "to take and use the same and the net Argued before FELL, C. J., and BROWN, Robert D. Maxwell, for appellants. Henry MOSCHZISKER, J. The will of the decedent, Charles D. Freeman, and the facts in connection therewith, have been passed upon in another opinion, this day filed in the appeal of Anna Dimond Freeman (75 Atl. 1063) from the same decree which we are about to consider. The orphans' court decided that, subject to the life estate given to his widow, the testator died intestate as to all of his property, and the estate of the widow was entitled to an absolute award of one-third of the decedent's entire personal estate. In making the decree of distribution one-third of the principal was awarded to the estate of the widow, but for some reason which does not appear in either of the opinions filed by the court below, none of the accumulations of income were awarded to her estate. Proper exceptions were filed in the court below, calling attention to this fact, all of which were dismissed. The assignments of error are based upon these exceptions. They not only cover the abstract question of the right of the estate of the widow to receive the accumulations of income properly apportionable to the principal awarded to her personal representatives, but they also contain numerous concrete figures concerning different items of income in the account. It is not necessary that we shall pass upon the particular sums to which the estate of the widow is entitled. We decide that her estate is entitled to all of the accumulations of income properly apportionable to the principal awarded to her personal representatives. To this extent the assignments of error are sustained, and to this extent the decree is reversed; and the record is remitted to the court below in order that distribution may be made in ac cordance with the above opinion. (227 Pa. 235) trol over its affairs, is the corporation liable CHESTNUT ST. TRUST & SAVINGS FUND on its promissory note given by the president CO. v. RECORD PUB. CO. (Supreme Court of Pennsylvania. Feb. 14, 1910.) 2. CORPORATIONS (§ 414*)-LIABILITY ON NOTE GIVEN BY PRESIDENT. Under such circumstances the corporation is liable on its note given by the president without express authority from the directors or subsequent ratification, where the corporation receives no benefit from the proceeds, the president using them for his own purposes, the note having been given to one paying full value without knowledge of the president's wrongful intent. [Ed. Note.-For other cases, see Corporations, Cent. Dig. § 1641; Dec. Dig. § 414.*] 3. LIMITATION OF ACTIONS (§ 155*)—COMPUTA TION OF PERIOD. Limitation in an action on such a note payable on demand is tolled by payments of interest made by the president's personal check, he owning practically the whole capital stock, and being in the habit of mixing its funds with his PAYEE. That the president of a corporation making a note of the corporation with intent to appropriate the proceeds was also president of the payee of the note, which was a financial institution, could not operate to charge such institution with knowledge of the president's wrongful intent. [Ed. Note.-For other cases, see Bills and Notes, Cent. Dig. 88 825-828, 842-848; Dec. Dig. § 340.*] Appeal from Court of Common Pleas, Philadelphia County. Action by the Chestnut Street Trust & Savings Fund Company, to the use of Richard Y. Cook and another, assignees of the creditors of the Chestnut Street Trust & Savings Fund Company, against the Record Publishing Company. From an order sustaining exceptions to the referee's report, plaintiff appeals. Reversed. without any express authority from the board of directors, or subsequent ratification where he uses the proceeds for his own purposes, and the corporation derives no benefit therefrom; and where the note is given to one paying full value without any knowledge of a wrongful intention on the part of such president? (2) In such a case, is the statute of limitations tolled by payments of interest made through the personal check of the president, he being the owner of almost the whole capital stock of the corporation, and in the habit of commingling its funds in one account with those of his own? (3) Would the fact that such president was also the president of the financial institution to which the note was given fix the latter corporation with knowledge of a wrongful intent on his part? For many years prior to 1890, William M. Singerly was the sole proprietor and owner of a daily newspaper known as "The Record." On June 28, 1890, he and four other incorporators organized The Record Publishing Company, corporation defendant. Singerly turned over to the new company the Record newspaper with all of its assets, and received in payment 9,600 shares of the 10,000 shares of capital stock, and also its entire bond issue. These securities were hy pothecated for loans to him. He was the tion to the time of his death. The company president of the company from its organizahad no by-laws and no officers designated to give notes. It gave from time to time a number of notes aggregating $500,000, which were signed by Singerly as president, and the proceeds of which, except in one instance, were used by him for his own purposes, and not for the purposes of the company. does not appear just how or in what form these notes were issued, nor that the directors knew of their issuance. The company was a "one-man" affair, and Singerly managed and controlled all of its business and finances, without instructions from or refence to the officers or stockholders. Neither stockholders nor directors held meetings except for the purpose of organization, and It once a year to elect officers. At the time of its organization the board passed the following resolution: "Resolved, that the management and administration of the Record STEW-be left to the direction of the president.". Argued before FELL, C. J., and BROWN, MESTREZAT, POTTER, ELKIN, ART, and MOSCHZISKER, JJ. P. F. Rothermel, Jr., for appellant. John G. Johnson and James Wilson Bayard, for appellee. After passing this resolution the directors abandoned to the president all their active duties. They did nothing to limit or define his powers, or to ascertain how he was managing the affairs of the company. In the words of the referee, they gave him "carte blanche" to do as he pleased, as though the real owner of the property. During this time Singerly was also the president of the plaintiff corporation, the Chestnut Street Trust MOSCHZISKER, J. Three questions are involved in this case: (1) Where from its inception, the stockholders and directors of a corporation completely abandon to the president the entire management and conFor other cases see same topic and section NUMBER in Dec. & Am. Digs. 1907 to date, & Reporter Indexes |