Rosenberg v. Rosenberg ( 1926 )

It is incomprehensible to me how it can be deduced that a sale to the Manhattan Investment Company for one hundred and twenty thousand dollars was a sale to Mrs. Ella Rosenberg for one hundred and forty thousand dollars. After much advertising and many efforts to sell the property for as much as one hundred and twenty thousand dollars, no offers could be received for more than one hundred thousand dollars, and the property was finally sold to the Manhattan Investment Company, a corporation consisting of Joseph Levinson and his wife, for one hundred and twenty thousand dollars, on February 27, 1919. It is true, that corporation then gave an option to Mrs. Rosenberg for the sale of the property to her within four years for one hundred and forty thousand dollars. This was done because she had advanced forty thousand dollars of the purchase money of the Sorrento Hotel property and desired to protect her interest. She did, at the end of about five years and five months, exercise her option, by paying the balance of the purchase price, and received title to the property. But when she exercised her option to purchase the property after the expiration of the four years granted her, she paid, she did not receive. The additional twenty thousand dollars, which is said to have been received by the executors, was paid by her to the Manhattan Investment Company. As has been said in the majority opinion, these legatees make no claim of fraud based on the fact that the executor, Levinson, had an interest in the corporation which became the purchaser of the property, nor could they well do so.

I am as urgent for the maintenance of the rule of conduct on the part of persons occupying highly fiduciary positions as anyone, and desire that it be sustained in its pristine purity. It is beyond me, however, to understand how that standard of fidelity can apply when twenty thousand dollars has been paid by a purchaser having only an option, to a known vendor, even though the property increased in value during the years that her option existed, so as to constitute a fraud on the residuary legatees. This is not a case like that of Hemrich v. Hemrich, 117 Wash. 124,201 P. 10.

If the sale to the Manhattan Investment Company is construed as a sale to Ella Rosenberg as of February 27, 1919, she did a number of useless and unprofitable things. Under the option which she took from the Manhattan Investment Company, that company continued to collect the increasing rents for over five years. Undoubtedly, she could have bought and had the title transferred to her directly in February, 1919, with the acquiescence of all concerned, for one hundred and twenty thousand dollars, and no circumlocution would have been necessary.

Moreover, these respondents, the residuary legatees, were of full age, and in all respects sui juris at all times during the litigation referred to in the majority opinion, and were represented by two of the most eminent firms in the practice of law in the state of Washington in former litigation these same respondents instituted. They brought into that litigation the same deal between Mrs. Rosenberg and the Manhattan Investment Company, and prayed disclosure as to the exact status of affairs at that time, March, 1919. They and their attorneys, after examining the books of the executors and into the acts and conduct of the executors, then entered into an agreement, voluntarily and knowingly, authorizing the settlement of the estate upon the basis of the sale of the Sorrento Hotel property to the Manhattan Company, for one hundred and twenty thousand dollars. It seems to me, if anything could constitute resjudicata, that former proceeding and the settlement thereof did so.

My opinion is that the judgment should be reversed. I therefore dissent.

FULLERTON and PARKER, JJ., concur with HOLCOMB, J.