BUNTON v. FIDELITY TRUST CO. ET AL., 349 Pa. 318 (1944)

36 A.2d 806

Bunton, Appellant, v. Fidelity Trust Company et al.

Supreme Court of Pennsylvania.March 23, 1944.
April 10, 1944.

Trusts and trustees — Conspiracy on part of trustee and others — Laches — Knowledge of complainant — Pleadings — Deficiency.

In an action in trespass against a trust company, which had been a co-trustee of the estate of plaintiff’s father, and against a number of its officers and employees, for damages arising out of an alleged conspiracy on the part of defendants to defraud plaintiff and deprive him of his interest in his father’s estate, in which it appeared, inter alia, from plaintiff’s statement of claim that the defendant trustee had acted with prudence in the matters forming the main grievances set up by plaintiff; that more than twenty-nine years had elapsed since the main transactions occurred; and that during all this time the plaintiff had been in a position to know what was being done and must have known what had taken place; it wa Held that the judgment of the court below sustaining an affidavit of defense raising questions of law should be affirmed.

Argued March 23, 1944.

Before MAXEY, C. J., DREW, LINN, STERN, PATTERSON, STEARNE and HUGHES, JJ.

Appeal, No. 16, March T., 1944, from decree of C. P., Allegheny Co., July T., 1942B, No. 1566, in case of Harry Russell Bunton v. The Fidelity Trust Company et al. Decree affirmed; reargument refused May 25, 1944.

Trespass.

The facts are stated in the opinion by THOMPSON, J., of the court below, McNAUGHER and THOMPSON, JJ., as follows:

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The plaintiff seeks to recover the sum of $650,000.00 as damages from the defendants. The principal defendant is The Fidelity Trust Company, formerly The Fidelity Title and Trust Company, and in addition eleven individuals, a number of whom are prominent members of the Bar and all of whom are officers or employes of The Fidelity Trust Company, defendant.

The basis of the action is alleged conspiracy on the part of the defendants to defraud the plaintiff and deprive him of his interest in his father’s estate.

The Statement of Claim covers 105 typewritten pages and consists of 197 paragraphs. The plaintiff has furnished us with what is entitled a “Condensed Statement of Statement of Claim”, which covers 43 typewritten pages. We have also been furnished with what is entitled “Second Condensed Statement of Statement of Claim”, which covers 16 closely written typewritten pages. The learned counsel for the defendant has also furnished us with a “Digest of Statement of Claim”, which covers 28 typewritten pages, but the learned counsel seems to have become exhausted when he completed Paragraph 186 of the Statement of Claim and closes with this statement: “We are unable to condense the sections from here to the end of the Statement of Claim”. An Affidavit of Defense Raising Questions of Law was filed in which the following Questions of Law are raised:

“1. Insofar as the allegations are understandable, the plaintiff has failed to state a cause of action.

“2. The allegations as to conspiracy among the defendants are mere statements of plaintiff’s conclusions of law.

“3. The allegations show upon their face that some matters complained of on page 9, paragraph 15 and page 15 paragraph 37 of the statement of claim were passed upon by the Orphans’ Court and are now res adjudicata.

“4. Plaintiff shows by his allegations as in the following instances: On page 8 paragraph 22; on page 21 paragraph 47; on page 38 paragraph 79; on page 39

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paragraph 82; on page 18 paragraph 43; on page 42 paragraph 88 of the statement of claim that he was familiar with the details of the transactions complained of throughout the course of years.

“5. The allegation of ‘recent discovery’ is a mere allegation of a conclusion unsupported by any recitation of facts.”

After these Questions of Law were argued before the court en banc, a motion to amend the Statement of Claim was filed on May 28, 1943, and an order made in connection therewith granting a rule to show cause why the amendment should not be allowed. On June 7, 1943 the rule was made absolute by a second order of court and by the terms of the order, the case was removed from the consideration of the court en banc. On June 23, 1943 a further order was made on petition of the defendants in which the order of June 7, 1943 was stricken off the record and the plaintiff’s amendment was directed to be filed “as though it had been presented prior to the filing of defendants’ affidavit of defense in lieu of a demurrer, in order to have the question raised by the pleadings as amended decided by the Court”. This order of June 23, 1943 restores the case to its former status and it is now again before us for determination on the Questions of Law raised.

The amendment changes the spelling of a name, also the numbering of certain paragraphs of the Statement of Claim, and the amount of certain items of cash, which are enumerated, and also embodies a claim for punitive damages and gives certain reasons why the plaintiff should not be charged with laches. The amendment, however, does not essentially change the action and the Questions of Law apply equally to the Statement of Claim as amended. Paragraph 190 in the original Statement of Claim consists of one sentence, a page in length; the same is true of paragraph 191, and paragraph 192 consists of one sentence more than a page in length. The whole controversy revolves around the administration

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of the estate of the plaintiff’s father, Isaac N. Bunton, Deceased. The main charges as we would summarize them are that the defendant trust company, the eleven individual defendants and certain other persons now deceased, who were former officers of the defendant company and went to their graves with unblemished reputations, as well as certain other persons, whose names are unknown to the plaintiff, all conspired to so manipulate this estate as to secure exorbitant and outrageous fees for its administration, and to deprive the plaintiff of his interest in the corpus of the estate and to acquire the entire estate for themselves.

It is averred that Isaac N. Bunton in the year 1888 purchased a lot of ground improved with a three story brick dwelling located at No. 3502 Fifth Avenue, Fourth Ward, Pittsburgh, Pennsylvania, having a frontage of 41 feet on Fifth Avenue and extending back 127 feet to a twenty foot alley. In the same year, Isaac N. Bunton conveyed this property to his wife, Jennie Bunton. In 1901, Isaac N. Bunton acquired the adjoining property located at 3500 Fifth Avenue at the corner of McKee Place having a frontage of 34.02 feet on Fifth Avenue and likewise improved with a three story brick dwelling. In the latter part of the year 1901, Isaac N. Bunton acquired a number of vacant lots in the 23rd now 15th Ward of the City of Pittsburgh and was granted mortgages on these vacant lots in the sum of $15,500.00 and $10,000.00 making a total of $25,500.00.

It is further averred that the Fidelity Title and Trust Company in some way in connection with the granting of these two loans induced the said Isaac N. Bunton to make his Last Will and Testament in which The Fidelity Title and Trust Company and the decedent’s sons, Edwin Walton Bunton and Charles Clifford Bunton were named co-executors and co-trustees; that during his life time the decedent, Isaac N. Bunton, sold a number of these vacant lots and reductions were made upon the mortgages at the time of the sales; that Isaac N.

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Bunton died on June 8, 1907 and his Last Will and Testament was probated and the Trust Company, defendant, and the two sons of the decedent, who were brothers of the plaintiff, all qualified as executors and trustees and undertook the administration of the estate; that in his Last Will and Testament Isaac N. Bunton provided that his entire estate should be preserved intact during the lifetime of his wife, and that the entire proceeds therefrom should be paid to his wife during her lifetime, and should the net income in any one year fall short of $3,000.00, the deficiency should be made up by a sale of the property in order to provide the sum of $3,000.00 per annum; that at his death, Isaac N. Bunton was seized of forty vacant lots heretofore referred to, subject to a mortgage amounting to $18,800.00 and also property at 3500 Fifth Avenue, which was free of encumbrances; that in addition the decedent had a one-third undivided interest in thirty-three lots in the City of Chicago, which were free of encumbrances; a two story and mansard brick house and lot at No. 4815 Monongahela Street, Pittsburgh, subject to a mortgage of $4,000.00; a two story brick and shingle dwelling at No. 402 Johnston Avenue, Pittsburgh, subject to a mortgage of $2,500.00; a two story frame house at No. 629 Turret Street, Pittsburgh, subject to a mortgage of $1,500.00 and a two story and mansard brick dwelling at No. 810 North Negley Avenue, Pittsburgh, subject to a mortgage of $4,000.00.

It is alleged that on July 24, 1907 Jennie Bunton conveyed her property at 3502 Fifth Avenue to the defendant trust company, Edwin Walton Bunton and Charles Clifford Bunton, trustees under the Will of Isaac N. Bunton, in trust, however, for the purpose of holding, managing and disposing of the same as though it were a part of the estate of Isaac N. Bunton, Deceased. This last mentioned deed was drafted by Malcolm McGiffin, Esq., an officer of the defendant trust company without consultation with the plaintiff, who was the

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attorney of the estate, but was later submitted to and approved by the plaintiff.

In addition to the real estate above described, there was personal estate belonging to Isaac N. Bunton which together with the proceeds of the sale of decedent’s interest in the Chicago property and as shown by certain accounts filed in the Orphans’ Court of Allegheny County amounted to the sum of $21,824.34. This sum is stated to have included all receipts by the trust company defendant within two and a half years after the death of Isaac N. Bunton.

It is charged that the defendant trust company in the course of its administration of the estate wilfully, maliciously and fraudulently abused the processes of the Orphans’ Court of Allegheny County in connection with the various proceedings, which came before said court from time to time in the administration of the trust; that the defendant trust company wilfully, maliciously and fraudulently neglected and failed and refused to effect any buyers for said vacant lots and that only two of the vacant lots were sold; that in 1915 the Fifth Avenue property was encumbered by a mortgage in the sum of $16,000.00. This mortgage was signed by all the heirs and beneficiaries of the estate of Isaac N. Bunton and Jennie Bunton, Deceased.

There are two charges, which seem to constitute the main cause of complaint on the part of plaintiff; one of them concerned the Fifth Avenue property located at the corner of Fifth Avenue and McKee Place. The heirs of the Bunton Estate proposed to borrow the sum of $75,000.00 to be secured by a mortgage on the Fifth Avenue property, the proceeds of which were to be expended in the erection of an apartment building on the premises. It is contended by the plaintiff that this would have made the Fifth Avenue property productive and that the mortgage could have been liquidated out of the income from the property. This proposed mortgage is spoken of repeatedly as a “self-liquidating” mortgage. The Trust Company after investigating this project declined

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to approve it. The other transaction concerned the vacant lots belonging to the Bunton Estate. In the year 1914 the plaintiff succeeded in negotiating a deal with F. E. McGillick, who is alleged to have been a successful real estate operator, who had real estate holdings, which were assessed for taxation between $400,000.00 and $500,000.00 and with a real value greatly exceeding the assessed value; that this proposed deal with F. E. McGillick was “sabotaged by said defendant trust company before it was consummated”. This proposed transaction involved at the beginning the improvement of sixteen of the vacant lots with duplex houses and later for the improvement of the remainder of the lots; that the financing of the construction was absolutely guaranteed by F. E. McGillick, who was to erect the buildings at a cost of $2,200.00 for each duplex building; that after the erection of the houses, F. E. McGillick was to receive for his services in building and financing the said houses one-half of the said houses after they were built and the titles to said lots were to be transferred to F. E. McGillick and the plaintiff in order to avoid involving the estate directly in the same with the provision that the estate was to be protected by a declaration of trust to be executed by the plaintiff and that the estate was to be secured by a purchase money mortgage upon the lots when they were transferred to the plaintiff and the said F. E. McGillick. The Trust Company also declined to approve this arrangement.

It is charged that at the time these arrangements were being discussed the Trust Company requested that arrangements be made by the heirs of the estate for the mortgage of $16,000.00 on the Fifth Avenue property before mentioned in order to take care of a small overdraft and to provide money to meet the carrying charges of said estate including the vacant lots.

It is averred that at the time the McGillick deal was obstructed by the defendant trust company, the vacant lots, which were then thirty-eight in number, were subject to a total mortgage indebtedness of $18,350.00 and

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that there was an equity in this property of about $35,000.00; that the heirs of the estate in order to provide for payment of the $16,000.00 mortgage abovementioned had applied to every trust company in downtown Pittsburgh and also a Philadelphia trust company, and that the trust companies of the City of Pittsburgh refused to grant the plaintiff and the other heirs of the estate the loans applied for, and that the application to the Philadelphia trust company was withdrawn at the suggestion of Mr. A. J. Kelly of the Commonwealth Trust Company, who had been commissioned by the Philadelphia trust company to appraise the Fifth Avenue property, and was unable to make an appraisement sufficiently high to meet the requirements of the Philadelphia trust company; that many persons in the millionaire class were appealed to by the remaindermen in vain to furnish a mortgage loan.

It is also charged that the efforts of the plaintiff and his associate heirs were also impeded “by dilatory tactics, legal chicanery and fraud on the part of Attorney John C. Slack of the Union Fidelity Title Company, corporation engaged in the business of examining and guaranteeing titles to real estate, which company was at that time a subsidiary of defendant trust company, being partly owned by said defendant trust company”.

Plaintiff further complains that between the death of his father on June 8, 1907 and the death of the life tenant on August 11, 1914 and for sometime thereafter “the plaintiff rendered a vast amount of services as legal, financial and economic adviser and representative of said heirs and beneficiaries of said estate, yet had received in actual fees for said services merely a credit of $200.00 against a debt of $700.00 or $750.00, which he owed to the testator on an unpaid promissory note, said services involving, besides the conduct of legal proceedings, the economic conservation, protection and development of values intrinsically and actually worth $150,000.00 and with potential values literally worth hundreds of thousands of dollars, * * *, the legal or

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politico-economic phase of said services including and involving the laying of a factual and evidential foundation and the gradual construction of a legal defense against a predatory system of the most sinister, subtle and insidious kind, which the plaintiff is endeavoring to establish and expose, in this suit for damages sustained by him”.

It is further charged that some party or parties, whose names to the plaintiff are unknown, conspired with the defendant trust company and the other defendants herein to cheat and defraud the plaintiff and the other heirs of the Bunton Estate by removing from the files of the Clerk of the Orphans’ Court and Register of Wills certain papers in connection with a proceeding relating to said estate at No. 132 October Term, 1914; that the defendant trust company wilfully, maliciously and fraudulently refused to permit the said co-trustees to participate in the control and disbursement of cash in the hands of said trust estates.

In Paragraph 87 it is averred that at No. 2 October Term, 1916 an amicable partition proceedings of said vacant lots before referred to was filed in the Orphans’ Court of Allegheny County in which the defendant trust company joined and by virtue of which a distribution of these lots was made among the heirs entitled thereto, the heirs being six in number.

It is averred that the mortgage on the Fifth Avenue property was executed and delivered by the plaintiff “while under the economic and financial domination, power, force, duress and coercion and oppression of said defendant trust company, which was exercised over the plaintiff and other heirs and beneficiaries of said estate.”

Certain proceedings in the Orphans’ Court are referred to by number and term, which the plaintiff alleges were conducted “not only while the plaintiff was under the financial and economic pressure, power, force, domination and dictation of said defendant trust company, as aforesaid, but also while and as a result of pressure exerted by said defendant trust company upon the plaintiff,

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through a wilful, malicious and fraudulent conspiracy, combination, confederation and agreement with Mrs. Margaret Willis and William C. Kent, to criminally prosecute the plaintiff at No. 735 April Term, 1928 of the Quarter Sessions Court of Allegheny County and before justice of the peace, James J. Westwood for the crime of forgery and perjury as a part of a scheme, design and plan to cheat and defraud the heirs and beneficiaries of said trust estates out of $463.06 covered by an assignment dated September 11, 1925 made by said Margaret Willis, tenant at 3502 Fifth Avenue, to said heirs of Isaac N. Bunton and Jennie Bunton as security for the payment of delinquent rent due from said Mrs. Margaret Willis to said trust estates”.

Plaintiff alleges that certain other mortgages, one for $20,000.00 dated August 30, 1929 and another for $18,000.00 dated February 16, 1929 were given to the trust company defendant secured by the Fifth Avenue property “for the purpose of imposing on said property still more self-aggrandizing debt and thus to accelerate the destructive process of economic and financial attrition, that the wilful, malicious and fraudulent conduct of said defendant trust company at the beginning of said trusteeship had set in motion with continuity of purpose, and continued to accelerate, where possible, down to the very last by every act and omission they could possibly perform or commit for that purpose”.

After making some reference to the nation-wide depression of market values of real estate, the plaintiff says in paragraph 101: “That said process of economic stagnation and decay with resulting and attending depression of said monetary or mercenary so-called ‘market values’ of said real estate, and especially of said Fifth Avenue property, was deliberately, intentionally, pre-meditatively, wilfully, maliciously and fraudulently designed, contrived and planned by said defendant trust company and the other defendants for the purpose of enabling said defendant trust company, or the party or parties, whose name or names are to the plaintiff unknown,

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in combination, confederation, conspiracy and agreement with the defendant trust company and said other defendants to take over, seize, acquire or buy said Fifth Avenue property for the amount of said alleged mortgage indebtedness and even less than the same, * * *”.

Certain of the individual defendants are charged as officers or trustees of the defendant corporation in connection with the management of the estate, and various questions regarding leases, collection of rents and making repairs are referred to as indicating in some way a concerted design on the part of all or certain of the defendants to injure the plaintiff.

Looking at the Statement as a whole, it seems to us as before indicated that the two main causes of complaint are first — the failure of the Trust Company to approve and coöperate in securing a mortgage of $75,000.00 on the Fifth Avenue property for the purpose of erecting an apartment house on those premises. We think that it cannot be fairly contended that the action of the Trust Company was lacking in prudence. On the contrary, its failure to coöperate in this transaction is to be commended. The same is true of the other proposed arrangement with F. E. McGillick and the plaintiff regarding the improvement of the vacant lots in the Hazelwood district. It is proposed that as part of this arrangement, title to these vacant lots should be transferred to F. E. McGillick and the plaintiff. It is not a violent assumption that the Orphans’ Court of this County would never have consented to such a transaction, and it is fair comment that no trust company of this city would ever dare to have proposed such a transaction to the Orphans’ Court.

During all the course of years, from the death of Isaac N. Bunton in 1907 down to the present date, plaintiff alleges that he was not only the attorney of the estate, but was actively engaged in advising and proposing economic plans for its welfare, and sets forth numerous proceedings in the Orphans’ Court in which

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he as counsel for the estate participated. He was at all times in a position to know what was done and must have known what took place in the management of the estate during this long period, yet he now says that it required a lapse of thirty-six years to enable him to discover this alleged conspiracy. He is one of six heirs and none of his co-heirs have joined him in this action. Two of his brothers were at all times co-trustees of this estate and must had some familiarity with its affairs. Plaintiff does not charge his brothers with this fraud and conspiracy, but confines these charges to the co-trustee defendant. It is nowhere set forth in the Statement of Claim just what fees the defendant company secured from this estate. No part of the estate has come into the ownership of the defendant company. The Fifth Avenue property is still owned by the estate and held in trust for the six heirs, and the Hazelwood lots or the remainder of them, thirty-eight in number, were all partitioned among the heirs in an amicable proceeding in the Orphans’ Court. If the defendant trust company entered into such a diabolical conspiracy as is repeatedly charged, there are no facts set up in the Statement of Claim to show that it in any way profited by this alleged conspiracy. It is averred that the defendant trustee repeatedly desired to be relieved of its duties and even this proposal on its part is charged with being another factor in the alleged conspiracy.

The Statement of Claim refers to numerous proceedings in the Orphans’ Court. If a conspiracy such as it alleged existed, and the heirs were being defrauded over a period of thirty-six years by the defendant trust company, the Orphans’ Court was a tribunal where these charges could have been investigated and determined in the course of the audits of the successive accounts filed by the trustees. If we strip this long Statement of Claim of the extraordinary exuberance of verbiage and the almost endless repetition of charges of fraud, and consider the specific facts, which are alleged, it seems to us that instead of a conspirary being legally charged that

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the facts mentioned indicate a careful and prudent management of this estate.

We have stated before that as we construe the declaration in this case, the main grievances set up relate to the failure of the defendant trust company to grant the Bunton heirs “a self-liquidating mortgage loan on said Fifth Avenue property for the purpose of erecting said fully modern apartment building”, and also the proposed financing of the vacant lots through an arrangement with F. E. McGillick. The first of these two transactions, to wit, the refusal to grant a Seventy-five Thousand Dollar mortgage on the Fifth Avenue property took place in the year 1913 and the second so-called McGillick transaction took place in 1914. In 1916 the vacant lots involved in the proposed McGillick transaction were all divided among the six heirs through an amicable partition proceeding in the Orphans’ Court. Since thirty and twenty-nine years, respectively, have elapsed since these two transactions occurred and since the claims of the plaintiff as a whole seem to us to be utterly fantastic, we do not think that the various defendants should now be required to answer this claim.

The questions of law raised in the Affidavit of Defense will, therefore, be sustained and the plaintiff will be barred from further maintaining this action.

Plaintiff appealed.

Harry R. Bunton, in propria persona, appellant.

Robert D. Dalzell, with him Park J. Alexander and Dalzell, McFall, Pringle Bredin, for appellees.

PER CURIAM, April 10, 1944:

The decree of the court below in the above-entitled case is affirmed on the opinion of Judge THOMPSON, costs to be paid by the appellant.

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