Bidelman Estate

61 A.2d 355, 360 Pa. 195, 1948 Pa. LEXIS 479

• Court: Supreme Court of Pennsylvania
• Decided: March 22, 1948
• Docket: Appeal, 34
• Status: Published

Opinions

Opinion by

Mr. Justice Allen M. Stearne,

The question presented is whether an orphans’ court, under section 33 [f] of the Fiduciaries Act of June 7, 1917, P. L. 447, 20 PS, 736, should award real estate to appellant at a valuation fixed in the will of decedent where, under an order of the court of common pleas, an agreement to sell such real estate had been previously approved by that court and the guardian of the estate of a then incompetent (decedent) had been directed by the court to make conveyance to appellant and her husband, but where such incompetent (decedent) died a few days after the order of sale and before the balance of the purchase money had been paid.

Margaret E. Bidelman, a widow, mother of eight children (appellant and seven brothers) was declared mentally incompetent. A corporate fiduciary was appointed guardian of her estate by a court of common pleas. The guardian petitioned that court for leave to sell the real estate therein described to appellant and her husband for $6,380 in conformity with their written offer. It was averred in the petition that a sale was necessary in order to secure funds to defray hospital expenses and that no other source of funds, was available. The petition was joined in by, or notice given to, all persons in interest. The court, on February 7, 1946, approved the private sale and, as authorized by section 6 of the Act of May 28, 1907, P. L. 292, 50 PS, 961, decreed that the guardian convey the real estate to appellant and her husband. $200 was paid to the guardian on account of the purchase price. Margaret E. Bidelman, the incompetent, died February 21, 1946, fourteen days after the order of sale. The balance of the purchase price has not been paid and no conveyance, has been made by the guardian.

By the third item of the will of Margaret E. Bidelman, it was provided that appellant should have the option to purchase the real estate for $4,000. The proceeds from such sale and also the proceeds from sales of any other real estate, were to be divided equally among her eight children. Appellant was named, and qualified, as executrix.

It will be observed (p. 56 a) that appellant was aware of the terms of her mother’s will when she and her husband entered into the written contract of sale with the guardian.

The substantive question is whether appellant and her husband will be required to pay the agreed consideration of $6,380 or whether the death of the incompetent, before the completion of the transfer, cancelled and annulled their agreement and order of the common pleas court and entitled appellant to elect to take such real estate for $4,000 under the terms of the will of decedent.

After the death of the incompetent, her guardian filed its account in the court of common pleas. The only asset was the $200 received on account of the purchase price of the real estate under the court’s order. There were unpaid claims aggregating $1,318.78, representing administration expenses, debts and funeral expenses. On June 3, 1946, the court confirmed the account and awarded the gross asset of $200 to the executrix of the estate of the incompetent (who is the appellant) and transferred such unpaid claims to decedent’s estate for consideration. No appeal was taken from this decree.

On August 15,1946, appellant petitioned and secured a rule to show cause why the order of February 7, 1946, to sell real estate should not be annulled, discontinued and stricken from the record, because the sale had not been fully consummated and appellant desired to accept the real estate at the valuation named in the will. Upon answer and hearing, the court in an opinion and decree dated December 20,1946, discharged the rule. No appeal has been taken from this decree which therefore has become final. Judge Griffith, in his opinion, accurately said: “The petitioner contends that since the guardian’s powers ceased upon the death of its ward, the order of sale should be stricken from the record. With this contention we cannot agree. The order of February 7, 1946, authorizing and directing the guardian to sell to the petitioner and her husband was valid when made and based upon a valid contract, upon which a down-payment had been made. The fact that the guardian’s powers ceased upon the death of its ward on February 21, 1946 (Frew’s Estate, 340 Pa. 89) did not, we believe, render invalid the contract of sale. It is true that the guardian, after the death of its ward, can no longer execute and deliver a valid deed to the purchasers. However, upon the ward’s death, the powers of the guardian, as her personal representative, passed to her executrix (Frew’s Estate, supra), who now has the power and duty of enforcing the contract of sale against the purchasers.”

In Frew’s Estate, supra, Mr. Justice Drew quoted with approval the following language: “It is an elementary rule of law that when an imbecile dies, in fact, his guardian dies, in law; his legal power is at an end. His sole duty then is to render an account of his stewardship up to the date of his ward’s death, giving the full amount of all debits and credits touching his administration, and of all unpaid claims and unfinished business. . . . The guardian is the personal representative of the ward while the ward lives; upon the ward’s death the administrator or executor becomes his personal representative as to any and all things pertaining to debtors and creditors of the estate, whether such debt or credit arose out of transactions with the ward himself or his personal representative in his lifetime, the guardian.”

Frew’s Estate was followed in Graham’s Estate, 147 Pa. Superior Ct. 57, 59, 23 A. 2d 235, which this Court affirmed in 346 Pa. 479, 31 A. 2d 125.

We therefore have a decision of the court of common pleas, unappealed from, that a binding and enforceable contract had been entered into by the guardian of the incompetent with appellant and her husband, but that the enforcement of such contract was now under the jurisdiction of the orphans’ court. With this we agree. When the ward died the guardian’s right to seek enforcement of the contract ceased. Liability under the contract, however, did not terminate. Exclusive jurisdiction for the enforcement of the contract was thereafter in the orphans’ court: Fiduciaries Act of June 7, 1917, P. L. 447, section 18 [b], 20 PS 612; Gable v. Whiteside, 242 Pa. 188, 88 A. 931; Cardon’s Estate, 278 Pa. 153, 122 A. 234; Bell et al. v. Bell, 287 Pa. 269, 135 A. 219; Mellingers Estate, 334 Pa. 180, 5 A. 2d 321; Manzer v. Wycoff and Wycoff, 78 Pa. Superior Ct. 560.

In the circumstances Outlined, appellant petitioned the orphans’ court to enter a decree awarding and adjudging the real estate in question to her under section 33 (f) of the Fiduciaries Act of June 7, 1917, P. L. 447, 20 PS 736. This section authorizes the orphans’ court, in appropriate circumstances, to adjudge real estate to a distributee who is to account for the valuation thereof in the settlement of the fiduciary’s account. Upon answer and' hearing, President Judge Nelson of the Orphans’ Court dismissed the'petition. The decision of the orphans’ court in dismissing the petition was correct. The obstacle to granting the relief is the unappealed decision of the common pleas court that there is a binding and enforceable outstanding contract for the purchase of this real estate executed by appellant and her husband. As decedent, in her lifetime, through ■her guardian, had transferred the equitable title to the real estate, her testamentary provision with respect thereto became inoperative. • ■ '

Buck’s Estate, 256 Pa. 359, 100 A. 866, and the cases therein cited, relied upon by appellant, are inapposite. There real estate - of an incompetent was sold for the support and maintenance of the ward. After the death, the unused portion of the fund was regarded and distributed as if real estate. In the present case there is no question before us concerning the; distribution of a fund derived from the sale of real estate. The question is whether, in the lifetime of decedent, appellant and. her husband, dealing with .the guardian, concluded an enforceable contract. Section 6 of the Act of 1907, supra, provides for both public- and private sales of the real estate of a mentally incompetent person. The guardian of the ward is required to petition the court for leave to sell. In the case of a public sale detailed requirements are enacted as to notice, advertising, etc. When' the court has directed such public sale, the Act requires that it ccshall be confirmedThere is a proviso, however, in the Act relating to,private sales. It reads: “Provided, that if the court shall be of the opinion that, under the circumstances, a better price can be obtained by private sale than at public sale, the court may decree and approve the same.”

Notwithstanding that provision, the argument of appellant seems to be' that the Act requires that even where the court has. “decreed and approved” a private sale as in this case, the guardian must nevertheless, again petition the court to confirm the terms of the same private sale which the court has already “decreed and approved”. That is an unreasonable construction which we must reject: see art. IV, sections 51 and 52 Statutory Construction Act of May 28, 1937, P. L. 1019, 46 PS 551 and 552. Neither are we in accord with appellant’s contention that the real estate had not been converted when a valid contract of sale had been concluded because of the decree and approval of the court. It has long been decided that a contract for the sale pf real estate is considered, in equity, as a conversion of land into money. The vendor’s interest thereafter ceases to be real estate. It becomes a chose in action and a personal demand for the consideration money. The. legal title is held by the vendor only as security for the payment of the debt: Longwell v. Bentley, 23 Pa. 99; Leiper’s Appeal, 35 Pa. 420.; Bender et al. v. Luckenbach, 162 Pa. 18, 22, 29 A. 295 and 296. See also: McClarren’s Estate, 238 Pa. 220, 228, 85 A. 1119, and Smith v. Glen Alden Coal Company et al., 347 Pa. 290, 299, 32 A. 227.

When the contract to sell the real estate was decreed and approved by the court $200 was received by the guardian on account. Nothing more remained to be done by the vendor except to sign and acknowledge the deed. An equitable title had passed. It is immaterial that the purchasers were the daughter and her husband. The case must be considered as if the purchaser was an outsider with no interest under the will. We should not adopt a rule which deprives such a purchaser of the value of his bargain; returning the down payment may not compensate; he may have spent money in searches, title insurance and the like, which a vendor would be required to pay in failing to make a conveyance agreed upon. Consideration of the sanctity of contracts requires the adoption of the-rule which we here apply.

As no proceeding is now pending before the orphans’ court for the specific performance of the contract, no decree may be made concerning the same. We think the court inadvertently stated as its conclusion of law that petitioner and her husband are indebted in the sum of $6,180; the amount payable will be determined in the specific performance action if it is found necessary to bring one.

Decree affirmed, without prejudice to the rights of the parties in interest to proceed in the orphans’ court for the specific performance of the contract. Costs to be paid by appellant.