Brown v. Brancato

184 A. 89, 321 Pa. 54, 1936 Pa. LEXIS 650
CourtSupreme Court of Pennsylvania
DecidedJanuary 28, 1936
DocketAppeal, 141
StatusPublished
Cited by36 cases

This text of 184 A. 89 (Brown v. Brancato) is published on Counsel Stack Legal Research, covering Supreme Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Brown v. Brancato, 184 A. 89, 321 Pa. 54, 1936 Pa. LEXIS 650 (Pa. 1936).

Opinion

Opinion by

Mr. Justice Linn,

On defendants’ petition, filed pursuant to the Act of March 5, 1925, P. L. 23, 12 PS, section 672 et seq., for the purpose of trying the jurisdiction, the learned court below held that it was without jurisdiction and dismissed plaintiffs’ bill. We granted a supersedeas. The bill was filed by the Directors of City Trusts 1 to restrain the defendants from carrying out their threatened purpose of proceeding, as a committee of the House of Representatives, with an investigation of the administration of the plaintiff Directors of City Trusts, inter alia, by taking possession of their books, records and accounts and otherwise impeding and interfering with them in the performance of their fiduciary duties. Defendants caused a general appearance to be entered on their behalf (Trust Co. v. Berkin, 299 Pa. 196, 149 A. 470; Gray v. Camac, 304 Pa. 74, 76, 155 A. 105) so that the jurisdiction of the subject-matter alone is now involved.

*57 Plaintiffs, as directors, aver that they have possession and charge of the property of many trust estates 2 held as charitable trusts for specified public purposes, aggregating in value more than $93,000,000, in the administration of which they have in their control and custody “great numbers of title papers, leases, contracts agreements, books of account, records and documents, many of which are of a private and confidential nature”; that defendants were members of the House of Representatives of the General Assembly, elected for the term of two years beginning December 1, 1934; that, pursuant to a resolution of the House of Representatives adopted May 22, 1935, supplemented by another of June 12,1935, defendants were appointed a committee “to make an investigation of the books, records, management, and operation of the Board of City Trusts [a name also designating plaintiff directors of city trusts] to the extent that may be necessary. ...” A copy of both resolutions is given in the margin. 3

*58 Plaintiffs aver that the resolution was neither submitted to nor concurred in by the Senate; that the General Assembly adjourned sine die June 21,1935, and that the power of the committee, if it had any before, ceased with the adjournment. They set forth a written demand on them made by counsel for defendants on September 5, 1935, “for copies of the full reports rendered by the Board by its accountants and auditors, Lybrand, Boss Bros. & Montgomery, covering the year 1934 and the nine years preceding” together with “access to all the *59 records, books, accounts and supporting data upon which the said reports are based.”

Plaintiffs aver that they have made and now make annual reports to the council of the City of Philadelphia, to the Board of Judges of Philadelphia County, and to the General Assembly of the Commonwealth as required by the Act of June 30, 1869, P. L. 1276, 53 PS, section 6481 et seq., but that, in addition, they have adopted a resolution (attached to the bill) stating that they welcome any audit of its accounts and examination of the manner in which the trusts are administered, which the Board of Judges (the appointing power) may see fit to order. They allege that the defendant committee is without power to do what it proposes and that, on the other hand, the duty which plaintiffs owe to their trusts requires them to resist such unauthorized action as that proposed by the committee, which, they aver, “would constitute an unwarranted infringement of the rights of the plaintiffs as trustees to privacy in the conduct of their duties as such trustees, and would cause irreparable damage to said trust estates by disclosing their confidential, private and intimate affairs. It would also involve, without justification, the expenditure of large sums of money belonging to said trust estates.”

In addition, plaintiffs aver that defendants propose, by subpoena duces tecum, to require production of the records, books, accounts and other documents of plaintiff directors, to the general disorganization of their trust administration. Various prayers for restraint were made. The order dismissing the bill, made by the learned court below, cannot be sustained.

1. There is no doubt of the jurisdiction in equity to entertain the bill. From the earliest days chancery has exercised jurisdiction over charitable trusts: Bispham, Equity, 9th ed., section 118. Chancery powers over trusts were exercised in this Commonwealth, “as part of our own common law” prior to the Act of June 16,1836, P. L. 784: Whitman v. Lex, 17 S. & R. 88 (1827) ; *60 Mayor, etc., of Phila. v. Elliott, 3 Rawle 170 (1831) : Lewis v. Lewis, 13 Pa. 79, 82; Henry v. Deitrich, 84 Pa. 286, 291. Section 13 of the Act of 1836 (17 PS, section 281) vests the court of common pleas with chancery powers in such cases “as the said courts have heretofore possessed such jurisdiction and powers, under . . . the laws of this commonwealth.” (See also article V, section 20, of the Constitution.) Furthermore, section 13 of the Act of 1836 (17 PS, section 282) confers equitable jurisdiction on the Philadelphia common pleas “so far as relates to,” inter alia, “The prevention or restraint of the commission or continuance of acts contrary to law and prejudicial to the interests of the community or the rights of individuals.” The plaintiffs are engaged in performing, in the “interests of the community,” fiduciary duties resulting from the acceptance by the city of fiduciary obligations imposed by the wills or deeds creating the trusts. 4 They possess both an individual and a common official interest in the preservation of the trust property. Section 4 of the Act of 1869, supra, 53 PS, section 6484, provides: “The said directors of trusts shall have power to make rules and by-laws for the proper regulation of their business, to appoint as many agents as in their judgment shall be required for the proper discharge of all the duties delegated to said directors, and determine the duties and compensation of all such agents and appointees; also in the name of the said city, and in accordance with the conditions of said charitable trusts, to make all leases, contracts and agreements whatsoever, which, in the course of the administration and management of said property, it may from time to time become necessary and proper to make and execute; and it shall be the duty of the said directors of trusts, for and in the name of the said city, to do, per *61

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Bluebook (online)
184 A. 89, 321 Pa. 54, 1936 Pa. LEXIS 650, Counsel Stack Legal Research, https://law.counselstack.com/opinion/brown-v-brancato-pa-1936.