Brereton Estate , 355 Pa. 45 ( 1946 )

We cannot concur with the majority view that the Act of May 24, 1945, P. L. 944, is a constitutional interference with the jurisdiction and powers of orphans' courts.

Before and since the Constitution of 1873 testators and settlors have granted powers of sale relying upon the heretofore unchallenged power of our orphans' courts to see to it that a fair price for estate assets is realized in the interest of beneficiaries, a class composed largely of widows, minor children and persons unborn. If the Act of 1945 is a valid exercise of legislative power, as the majority holds, then the orphans' courts have been rendered impotent to protect their wards in such cases. Under the Act, any agreement made by an incompetent or inexperienced fiduciary with power of sale will be enforceable against the estate, despite gross inadequacy of consideration, except in the infrequent case where fraud, accident or mistake can be proved. In the present case, where the fiduciary was not acting under a power, application of the Act results in a loss to the beneficiaries of $2,160 and a corresponding gain to the vendee. Had he been acting under a power, the original agreement fixing the purchase price at $25,000 would have bound the estate irrevocably, and the loss to the beneficiaries would have been increased to $5,000. The court would be equally powerless to interfere, in the supposed case of a fiduciary acting under a power, if the original agreement had called for a purchase price of $1,000, with a resulting loss to the estate of $29,000. This Act goes far beyond the suggestion of the concurring Justices in Kane v. Girard Trust Company, 351 Pa. 191, 40 A.2d 466, where they said that, — "In the absence of fraud, accident or mistake, and when the price is adequate, we can discover no reason why an honest sale made by a fiduciary should be set aside merely because of a subsequent higher offer" (Emphasis supplied). What this legislative enactment does is to restrict an exercise of judicial power, viz., the power relevantly to adjudicate the value of trust assets whose administration is subject to court jurisdiction and, also, the power to supervise, regulate and control the conduct of fiduciaries into whose care and custody such assets have been committed.

By Art. V, section 1, of the Constitution, the judicial power of the Commonwealth is vested, inter alia, in orphans' courts, and in such other courts as the General Assembly may from time to time establish. Although the courts thus ordained have been, and in the future likely will be, implemented from time to time by the legislature for the purpose of their appropriate efficient and uniform exercise of the judicial power, such courts are, nonetheless, created by and now exist under the Constitution itself. That is necessarily so or otherwise the legislature could divest the courts of all their powers and thereby in effect abolish our judicial system. But, that, the legislature may not do: Commonwealth v. Green, 58 Pa. 226, 229;Reid v. Smoulter, 128 Pa. 324, 335, 18 A. 445. The quotation in the majority opinion from Reid v. Smoulter, supra, is so peculiarly apposite here as to justify its repetition, at least in part, as follows: "We think it would not have been competent for the legislature, by repeal of this act [of May 19, 1874, setting up separate orphans' courts], to defeat and set aside the constitutional tribunals thus established [Art. V, sec. 22]; for these courts, although put into actual operation bythe legislature, were created by and now exist under theauthority of the constitution itself. Having done what the constitution required, it would not have been in the power of the legislature wholly to undo it. The constitution itself set up this system of . . . Courts, and it is for the legislatureto regulate and maintain, not to destroy it." (Emphasis supplied).

Of necessity, the legislature has specified and delineated the powers of the courts, including the orphans' courts, and thus has regulated the practice and procedure therein. But the essentials of the constitutionally reposed jurisdiction are fundamental attributes of the courts and beyond the power of the legislature to abridge so long as these constitutional courts are to continue as such. In short, the legislature may deal with the function and powers of the orphans' courts only to the extent necessary to render them adequate for the exercise of the judicial power committed to them by the Constitution. Compare Penn Anthracite Mining Co. v. AnthraciteMiners of Pennsylvania, 318 Pa. 401, 412, 178 A. 291.

As applied to sales under a testamentary power, the Act of 1945 operates to deprive the orphans' courts of a power exercised by them from early Colonial days, viz., the power to control and supervise executors and other testamentary fiduciaries. See Act of March 27, 1713, Law Book A, Vol. 2, p. 73. The power to control presupposes a power to review and set aside: Dundas's Appeal, 64 Pa. 325, 331; Orr'sEstate, 283 Pa. 476, 479, 129 A. 565. To say that the orphans' courts possess such power of supervision and control, and at the same time deny to them the right to review, set aside and if necessary order a resale, as this Act expressly does, is to deny the power itself. This legislation strikes at the very vitals of the jurisdiction and power of orphans' courts to control executors and other testamentary trustees, to supervise the sale of real and personal estate of decedents, and to protect the interests of widows, minor children and persons unborn. In a large class of cases it defeats the primary purpose for which the orphans' courts were created and continued by our several constitutions, i.e., "That Care might be taken for those that are not able to take care for themselves": Act of March 10, 1683, Duke of Yorke's Book ofLaws, p. 131, quoted in Wimmer's Appeal, 1 Whart. 96, 102.

If the Act of 1945 were a constitutionally valid exercise of legislative power, we should still be unable to see how a sale by an orphans' court of a decedent's real estate for the payment of his debts could be thought to come within the purview of the Act. Its concern and scope are the conclusiveness and enforceability of fiduciaries' contracts; and no such contract is here involved. The court flatly rejected the only fiduciary contract ever introduced in this proceeding. Nor does it help any to fictionize by saying that the court's acceptance of a higher bid and its direction to the fiduciary to make a deed for the property to the bidder was tantamount to the court's approval of a new contract by the fiduciary. The sale of a decedent's real estate for the payment of his debts has long lain peculiarly and exclusively within the jurisdiction and power of an orphans' court: See Act of March 10, 1688, Duke of Yorke's Book of Laws, p. 180. Even though an exercise of such jurisdiction be invoked on the basis of an antecedent agreement between a fiduciary and a prospective purchaser, action thereafter taken by the court in pursuance of the agreement is "not a sale on the contract but one under the authority of law": Powers Estate, 153 Pa. Super. 161,165, 33 A.2d 501. And, the control of such a sale ". . . remains in the power of the court until a deed has been executed and delivered": Demmy's Appeal, 43 Pa. 155, 168.

The law as above stated appears to have been the rule uniformly followed by the courts of this State at least since the decision in Demmy's Appeal, supra, in 1862; and the rule there enunciated was but an interpretation of the statutory definition of the orphans' court powers in such regard under Sec. 19, cl. IV, of the Act of June 16, 1836, which was carried into the Orphans' Court Act of 1917 as Sec. 9, cl. (f). Consequently, when the Act of 1945 is construed so as to embrace a fiduciary's contract for a private sale of a decedent's real estate for the payment of his debts, yet necessarily subject to due proceedings in an orphans' court, then the Act is additionally unconstitutional in that it works an amendment of extant orphans' court statute law without so fore. casting in its title and without specifying the amendment in its body as required, respectively, by Art. III, sections 3 and 6, of the Constitution.

The Act of 1945 further violates the same constitutional provisions last above cited. The law with respect to the power of the orphans' courts over fiduciaries even to the extent of reviewing, setting aside and, if necessary, ordering a resale "of real estate made under a testamentary power" (Dundas'sAppeal, supra, p. 331) was likewise an interpretation of the statutory definition of the orphans' court powers in such regard as contained in section 19 of the Act of June 16, 1836, which section 9 of the Orphans' Court Act of 1917 carried forward. The statutory provision as interpreted in Dundas's Appeal, supra, became firmly established in our law by later decisions of this Court:Orr's Estate, supra; McCullough's Estate, 292 Pa. 177,140 A. 865; Kane v. Girard Trust Company, supra. Yet, in apparent disregard of Art. III, sections 3 and 6, of the Constitution, the Act of 1945 is now judicially accredited as an amendment of cognate prior statute law without so much as a reference in the title of the Act to its amendatory intent or the slightest intimation in the body of the Act of any amendment therein contained.

The majority opinion holds that the authorities show the Act of 1945 is not in conflict with Article V, section 1, citing four decisions. But not one of these cases involved an Act comparable in terms or effect with the legislation now before us. The basic principle of the decisions referred to is that the Constitution having granted to the legislature, by section 1 of Article V, the power to create from time to time courts other than those enumerated, nothing contained in the subsequent sections of that article is sufficient to deprive the legislature of the power to create courts of a different class or grade, and to transfer to the courts so created some of the jurisdiction of the courts enumerated, or vest in them a limited concurrent jurisdiction: Gerlach v. Moore, 243 Pa. 603,609, 90 A. 399. Here neither the power to create "such other courts as the General Assembly may from time to time establish", expressly conferred in the first section of the judiciary article, nor the power to vest some part of the existing judicial powers in "such other courts," is in any way involved.

For the reasons stated, we would declare the Act of 1945 unconstitutional and affirm the decree of the court below.