decided as amended february 9 1972.: January 26, 1972.
Seitz, Chief Judge, and Kalodner and Gibbons, Circuit Judges. Seitz, Chief Judge (concurring in part and dissenting in part).
Appellant, Comte Guy Dubern, a citizen and resident of France, is the universal legatee under the last will and testament of Ellen Waln de St. Marc, Marquise de Meyronnet de St. Marc. In that capacity Dubern in this diversity case sues the Girard Trust Bank over its handling of certain securities transactions on behalf of the marquise shortly before her death on February 26, 1964. Under French law a universal legatee is an approximate combination of the sole beneficiary and personal representative of a decedent's estate under Pennsylvania law.
The relationship between Girard and decedent marquise was set forth in a letter agreement dated May 10, 1946 (Exhibit P-1) establishing what Girard refers to interchangeably as a Supervised Agency Account or an Investment Advisory Account. In that agreement the decedent, referred to as the owner, directs Girard to open such an account ". . . and to hold therein as Agent for the Owner all stocks, bonds, securities, and other property, from time to time deposited . . .subject to the following instructions . . .". The instructions refer to a semi-annual analysis of the account after review by Girard. The agreement provides, however, that "the reviews made by the Company are to be supervisory only, and no action is to be taken with respect to the Account except upon the direction and sole responsibility of the Owner." It also provides that "the Company, as Agent, will buy and sell stocks, bonds, or other investments comprising or to comprise the Account, upon the written direction of the Owner, or such person or persons as the Owner may from time to time designate by proper written authority." Although the management of supervised agency accounts was housed in Girard's trust department, it is clear that the relationship between the decedent and Girard was that of principal and compensated agent, not that of settlor and trustee or cestui and trustee.*fn1
On March 12, 1963 the decedent executed a written power of attorney which among other extremely broad powers authorized Dubern to withdraw funds from any bank, to sell securities of whatever kind and wherever located and to make purchases of other securities. Girard was advised of the execution of this power of attorney on March 28, 1963. It declined to acknowledge Dubern's authority over the funds in its custody for some time, however, apparently out of concern over the authenticity of the power of attorney or over the principal's capacity. On December 20, 1963, it did finally agree to acknowledge Dubern's authority to this extent:
"It was not our intention to question the authenticity of the instrument forwarded to us by Mr. Prat. It appears, however, the effect of such a Power of Attorney in your country differs from our practice here, and some difficulties remain to our way of thinking. We are most anxious to cooperate with you in handling the Marquise's affairs, and rather than press the legal question further, we would like to offer a suggestion which may, for the present at least, resolve our difficulties in a manner satisfactory to both of us.
We have no hesitancy in remitting funds from the Investment Advisory Account for deposit to the Marquise's account in Barclay's Bank, Cannes. We would then inquire, whether, under your Power of Attorney, you could not handle any required distribution from the Barclay's account.
We will await your instructions, although if for any reason you desire a remittance before year end, you might wire us instructions."
Thus as of December 20, 1963 Girard, while acknowledging the authenticity of the power of attorney to Dubern, declined to follow his instructions to the full extent specified in the agency agreement, Exhibit P-1.
On February 1, 1964, Dubern, by a letter which was received at Girard on February 5th and translated on February 7th, instructed Girard to sell securities in order to raise $115,000 and to transfer this sum to decedent's account at Barclays Bank. The translation of this letter, Exhibit P-31, discloses that Dubern was still dissatisfied about Girard's long delay in arriving at a decision with respect to its duty to act on his instructions. He also wrote (as translated):
"For the immediate present, I give my accord to your proposal ordering payment of funds only under my signature and solely for the benefit of the account of Ellen Waln de St. Marc, Marquise de St. Marc, with Barclays Bank, Cannes.
Your customer may, in France, take into account her age, obtaining double the income indicated above, exempt from present and future tax. The capital indexed on the price of gold in Paris and the stocks having a very large market. On short term the risk of effective devaluation ...