Opinion
January 3, 1939.
January 26, 1939.
Orphans' court — Practice — Review of account of fiduciary — Discretion of court — Expiration of five years — Fraud — Failure of trustee to disclose prior ownership of trust investments — Act of June 7, 1917, P. L. 447.
1. The granting or refusal of a petition for review under section 48 of the Fiduciaries Act of June 7, 1917, P. L. 447, is, as to matters existing at the time of the adjudication but not of record, within the sound discretion of the orphans' court, and will not be reviewed unless there is an abuse of discretion. [219]
2. After five years such petition will be denied except in cases of actual fraud. [219]
3. Failure of a trustee to disclose its prior ownership of mortgages in which it invested the trust funds held not to have constituted fraud within the exception to section 48, where it appeared that there was no act of concealment on the part of the trustee, and its previous ownership was a matter of public record easily ascertainable at the time of adjudication. [219-20]
Argued January 3, 1939.
Before KEPHART, C. J., SCHAFFER, LINN, STERN and BARNES, JJ.
Appeals, Nos. 96, 119-23, Jan. T., 1939, from decree of O. C. Phila. Co., Jan. T., 1886, No. 415, in Estate of Charles D. Colladay, deceased, sur trust for Sarah E. Chorley. Decree affirmed.
Petition and rule to open and review adjudication.
The opinion of the Supreme Court states the facts.
Preliminary objection sustained and petition dismissed, before VAN DUSEN, P. J., STEARNE, SINKLER, KLEIN, BOLGER and LADNER, JJ., opinion by VAN DUSEN, P. J. Petitioners appealed.
Error assigned, among others, was dismissal of petition.
Maurice J. Klein, with him Loewenstein Winokur, and Bernard Axelman, for appellants. Gordon A. Block, of Wolf, Block, Schorr Solis-Cohen, for appellees, were not heard.
Application was made in the court below to review an account and distribution made more than five years ago. The application was under Section 48 of the Fiduciaries Act of June 7, 1917, P. L. 447. The Columbia Trust Company, predecessor of the Integrity Trust Company as trustee for Sarah E. Chorley, invested trust funds in nine mortgages previously held in its own portfolio, the settlor having directed it to invest "in such securities as trust funds may by law be invested." The source of these mortgages was not, either at the time of the transfer or at any time thereafter, disclosed by the trustees but was discovered "as a result of an independent investigation." The court below sustained the substituted trustee's objection to opening the account.
The principal reason urged is that the failure of the trustee to disclose its prior ownership constituted fraud within the exception to Section 48. The granting or refusal of a petition for review under Section 48 is, as to matters existing at the time of the adjudication but not of record, within the sound discretion of the orphans' court, and will not be reviewed unless there is an abuse of discretion. After five years such petition will be denied except in cases of actual fraud. There are no exceptions to the rule. Here there was no act of concealment on the part of the trustee, and its previous ownership was a matter of public record easily ascertainable at the time of adjudication. Under these circumstances the transfer of the mortgages and failure to reveal prior ownership would not constitute such fraud as is contemplated by the decisions under Section 48, and the court below did not abuse its discretion in refusing relief. The cases relied upon by appellants have no bearing on the statutory limitation.
This rule is fully discussed in Bailey's Est., 291 Pa. 421, 424, and followed in Chauncey's Est., 303 Pa. 441, 445; Capuzzi's Est., 306 Pa. 27, 34, and Downing, Exr., v. Felheim et al., 309 Pa. 566, 574. The comparable rule as to the opening of judgments at law is discussed in Sallada et al. v. Mock et al., 277 Pa. 285.
Cope's Est., 328 Pa. 296. See also Stetson's Est., 305 Pa. 62, 71; Daub's Est., 313 Pa. 35, 42; Elkins's Est., 325 Pa. 373, 376; Neafie's Est., 325 Pa. 561, 564; Knox's Est. (No. 1), 328 Pa. 177, 187. As to judgments at law, see McEvoy v. Quaker City Cab Co., 267 Pa. 527; Philadelphia v. Brill, 328 Pa. 471, 473.
The decree is affirmed.