Appeal, No. 148, Jan. T., 1957, from order of Orphans' Court of Lackawanna County, dated August 15, 1956, No. 140, in re estate of M. E. Comerford, deceased. Order reversed. Proceedings upon petition of residuary legatee to reopen and review account of executor and upon rule to take testimony in support of exceptions. Order entered confirming account; petition for review dismissed and rule discharged, opinion by BRADY, P.J. Residuary legatee appealed.
Paul A. McGlone, with him John T. J. Brennan, for appellant.
Edward W. Warren, with him Thomas F. Friday, J. Charles Hanahue, and Warren, Hill, Henkelman & McMenamin, for appellee.
Before Jones, C.j., Bell, Chidsey, Musmanno, Jones and Cohen, JJ.
OPINION BY MR. JUSTICE BENJAMIN R. JONES
This is an appeal from a final order of the Orphans' Court of Lackawanna County refusing to permit the opening and review of an account*fn1 in this decedent's estate.
M. E. Comerford died, testate, on February 1, 1939. Three provisions of his will are relevant to this appeal: a provision creating a trust in stock of a Delaware corporation known as Penncom Corporation, a provision disposing of his residuary estate and a provision appointing two executors.
Item 7 of the will created a trust of which the entire res was such capital stock of Penncom Corporation (hereinafter called Penncom) decedent owned, either in his own right or as trustee, at the time of his death; two nephews, Frank C. Walker and M. B. Comerford, were named the trustees.*fn2 Decedent disposed of the remainder of his estate as follows: (1) to Margaret Comerford, his widow, a 1/3rd interest; (2) to Mariel Comerford, a niece, a 1/9th interest; (3) to six nieces and nephews, children of a deceased sister, Ellen Walker, a 1/9th interest; (4) to six nieces and nephews, children of a deceased brother, Patrick Comerford, a 1/9th interest; (5) to a brother, John Comerford, and a sister, Margaret Cary, each a 1/9th interest; (6) to five nieces and nephews, children of a deceased sister, Mary Collins, a 1/9th interest. Two nephews, Frank C. Walker and M. B. Comerford, were named as executors under the will.
Upon probate of decedent's will, letters testamentary were issued to the appellee, Frank C. Walker, his co-executor, M. B. Comerford, having predeceased the decedent. Approximately one year later - January 31, 1940 - an inventory was filed which listed assets valued at $1,739,771.32.
No account was filed by the appellee until February 14, 1955 - 16 years after the grant of letters.
The appellee filed his first account on February 14, 1955 and this account was advertised for confirmation nisi on June 6, 1955 and final confirmation on June 17, 1955. After confirmation nisi of this account on June 6, 1955, the lower court permitted appellee to withdraw and amend the account and extended the date of final confirmation to September 22, 1955. The amended account - filed August 23, 1955 - was confirmed nisi on September 12, 1955 and the time for final confirmation extended, at appellant's request, to October 31, 1955. In February 1956 - due to a procedural change in the Orphans' Court Rules of Lackawanna County - notice was given by publication of the filing of this account and that it would be presented to the court for confirmation nisi on March 5, 1956 and, if no objections were filed by March 16, 1956, the account would be audited on March 20, 1956. The account was confirmed nisi on March 5, 1956 and presented for audit on March 20, 1956.*fn3
On September 21, 1955, the five children of M. B. Comerford, a deceased nephew (holders of a 1/54th interest in decedent's estate), filed 41 exceptions to the appellee's account of August 23, 1955.*fn4
These exceptions charged appellee with malfeasance, nonfeasance and misfeasance in his administration of this estate. These exceptions charged, inter alia: (1) that appellee, without authority, borrowed in excess of one and a half million dollars; (2) that appellee failed to include in the account all the assets and income of the estate; (3) that appellee over a 13
year period - up to 1952 - improperly advanced to legatees (other than exceptants who received no advances) amounts in excess of $1,000,000; (4) that capital losses occurred in some of decedent's business ventures which were attributable to appellee's mismanagement of these ventures; (5) that the account shows a fictitious "credit due decedent" of approximately two and a half million dollars which was created by the alteration on or about March 15, 1955 of certain book entries and records;*fn5 (6) that appellee was dilatory in completing the administration of the estate and as a result thereof the estate was subjected to large interest and penalty payments on estate and inheritance taxes and excessive income taxes; (7) that appellee failed to convert securities, particularly so-called non-legal securities, with a resultant loss to the estate; (8) that appellee commingled estate funds with funds of certain individuals, other estates and corporations; (9) that appellee violated the rule against "self-dealing" in his administration of the estate; (10) that in the account of February 14, 1955 appellee set forth that the estate had liabilities in excess of one and onehalf million dollars, whereas in this account all liabilities have been elminated; (11) that appellee, together with one J. J. O'Leary, acting in fiduciary capacities, engaged in borrowing from certain accounts for the purpose of concealing corporate earnings, facilitating unequal distributions in this and two other estates, postponing settlement of these estates and maintaining complete control over the various Comerford corporations.
On December 15, 1955, with the lower court's approval,
these exceptions were withdrawn and the account confirmed finally on the same date.*fn6
At the audit of the account - March 20, 1956 - appellant (holder of a 1/54th interest) petitioned the court to open and review the account for reasons referred to infra. After hearing, the court refused to open and review the account. Exceptions having been taken to this order, appellant then petitioned the court for a rule to take testimony in support of her exceptions. On August 24, 1956 the court confirmed the audit, dismissed the exceptions, discharged the rule to take testimony and refused to open and review the account. From that order this appeal was taken.
Appellant's request to open and review the account had a two-fold purpose: (1) to determine whether decedent at the time of his death owned any Penncom stock and (2) to determine whether the executor had unlawfully and improperly used an estate asset - 1,000 shares of Penn State Realty, Inc. stock - to secure a personal advantage, ...