Appeal, No. 4, May T., 1962, from decree of Court of Common Pleas of Dauphin County, No. 2338 Equity Docket, 1958, in case of Kathryn Bolton, Margaret Hoover, Raymond Swartz et al. v. Robert E. Stillwagon, J. Edward Dehner, individually and trading as Landco. Decree reversed in part and affirmed in part.
H. Joseph Hepford, with him LeRoy S. Zimmerman, for appellants.
Richard W. Cleckner, with him Nissley, Cleckner & Fearen, for appellees.
Before Bell, C.j., Musmanno, Jones, Cohen, Eagen and O'brien, JJ.
OPINION BY MR. JUSTICE O'BRIEN
The instant appeal is from the final decree of the court below in an action in equity commenced by the individual plaintiffs, lot holders in Shoop's Cemetery
Association, and the association itself as intervening plaintiff, against the individual defendants, trading as Landco, a partnership. The complaint in equity sought, inter alia: a declaration that the defendants held certain land as trustees for the cemetery association; an order directing defendants to reconvey the land to the cemetery association and an order directing the defendants to account for any profits realized from the resale of said property. The chancellor made findings of fact and conclusions of law and entered a decree nisi which, in effect, held that defendants stood in a fiduciary rather than a trustee capacity and ordered them to reconvey land to the cemetery association, but directed the cemetery association to reimburse defendants for expenses incurred in improvement of the property during the period of defendants' ownership, and directed that costs of the case be divided between the parties. Plaintiffs filed exceptions to the findings and conclusions of the chancellor and to the decree nisi, which exceptions were overruled and the decree nisi made final. The cemetery association appeals, seeking a reversal of that portion of the decree of the court below which orders reimbursement of the defendants and a division of the costs.
The controversy arises out of the operation of the perpetual care fund of the association and involves the alleged misuse of assets of the perpetual care fund by the individual defendants who were officers and directors of the cemetery association. The facts are well stated in the opinion of the court below as follows: "The Cemetery Association maintained a fund for the perpetual care and preservation of the grounds and the repair and renewal of buildings and property connected with the cemetery. From time to time money of this fund was invested in real estate mortgages. Two of the mortgages became delinquent and execution was issued against the real estate covered by the mortgages.
"The attorney for the Cemetery Association was the successful bidder at the sheriff sale.
"Before the sheriff's deeds were prepared, the attorney for the Cemetery Association suggested to the defendant, Stillwagon, that the Cemetery Association was not properly set up to manage real estate and invest additional money in real estate and that an attempt should be made to find a purchaser for the properties.
"Upon inquiry by Stillwagon, the attorney for the Cemetery Association advised him that the purchaser could be a member of the Board of Directors of the Cemetery Association if an honest, fair and full disclosure of the transaction ...