Estate of Helfenstein , 26 W.N.C. 194 ( 1890 )

Opinion,

Mb. Justice Mitchell :

Though called a petition, this is, in substance, a bill for an account and re-conveyance, and the reference in general terms to an auditor made him, in effect, a master, with all the duties and powers usually appertaining to that position. The learned auditor, therefore, was clearly right in defining the scope of his office.

The facts are distinctly found, and are not substantially in dispute. The deed of November 1,1857, from Helfenstein to Keichline, conveyed certain real estate in Northumberland county, “to hold and retain the said property.....as a security, and keep the same for the space of one year after the following notes become due, for the purpose of securing and making safe to creditors the following sums,” then naming the creditors, the amounts, and the times of payment, and concluding, “ after the above-mentioned notes or obligations are paid, .....to re-convey” to Helfenstein. The purpose of this deed is entirely clear. It is to save the grantor’s property from immediate sacrifice, by the provision that the grantee shall hold it for a year after the notes should come due, and, subject to that restriction, to secure the creditors, if the specified notes were not otherwise paid. This necessarily implied Keichline’s power to get the money out of the property; for, otherwise, the deed was not only worthless for its main purpose, the securing of payment to the creditors, but would be fraudulent, as withdrawing the property from their reach. The clause as to re-conveyance was no more than the expression of wbat the law implies in all eases of mortgagees, trustees, assignees for the benefit of creditors, or holders of securities of any kind, to wit, the duty to restore the property, or the balance of its proceeds, to the owner, after all the purposes of the trust are accomplished.

The purpose and operation of the deed being thus clear, it is not of much consequence by what name it should be called, but that it was in substance a mortgage, and to be treated as such in regard to proceedings upon it, are so well shown by the learned auditor that we refer to his report upon this branch of the case without further discussion. Treating it as a mortgage, Keichline, after the appointed time, proceeded to judgment and execution upon it, and at the sale bought in the property, held it for several years, sold it to Patton, had the sale approved by the court, and then filed an account in the Common Pleas of Northumberland county, and distributed the proceeds in his hands under its decree. The auditor finds that these proceedings were regular, that they divested the equity of redemption, that there was no surplus in which Helfenstein or his representatives could be interested, and that petitioners, therefore, have no standing to demand an account. In this we entirely concur.

It is objected that the account should have been filed in Philadelphia; and Johnson’s App., 108 Pa. 373, is cited in this connection. This case, however, is so well distinguished on its facts by the learned auditor that the appellants disclaim in their argument anjr intention “ to attack or question anything that appears on the face of the account,” and limit their contention to the fact that the account does not include rents or profits of the property from 1862 to 1868, while it was in the possession of the accountant, and their right to an account now for such rents. The position is ingenious, and has been supported by a very able and forcible argument from the learned counsel of appellants, but we do not think it can be sustained. The account was an account by Keichline of his trust; it is stated as his first and final account as trustee, and was filed in a court of general jurisdiction of such subject-matters. There was no inherent want of jurisdiction, but only a possible objection in the particular case, depending on the fact of the accountant’s residence at the commencement of the trust. No such objection was made ; and as, if it had been made, and the fact decided by the court in its own favor, the jurisdiction would have been beyond all question, the decree cannot now be held void as coram non judice. On the contrary, it is regular on its face, is upon a subject-matter over which the court had general jurisdiction, and is therefore conclusive in all collateral proceedings, not only as to all matters that actually were raised, but all that were legally included, and therefore might have been raised under it. The present question of surcharge for rents was clearly one of these matters. The auditor has found that the fund sufficed only to pay the creditors 65 per cent of the face of their claims. If, therefore, they could surcharge the accountant with the rents now claimed to have been collectible by him, it was plainly their interest to do so. But, more than this ; behind these creditors stood Helfenstein’s assignees for the benefit of his creditors in general, to whom the equity of redemption belonged at the time of the sale, to whom any balance of the fund would come after payment of the secured creditors, and whose duty and interest it therefore was to see that Keichline accounted in full for every dollar that he either did make, or ought to have made, out of the property, in the performance of his trust. The master has found that there is no evidence that he did collect any such rents; and the fact that two parties to the proceeding, creditors and assignees, did not undertake to show that he ought to have collected any, raises a strong presumption that there was no sufficient ground for such a surcharge. But, whatever the evidence, then was the time to make the surcharge ; and, not having been made then, it is now concluded by the decree.

There is another view of the case which is also conclusive against appellants on the merits. It is plain that they have lost nothing. Suppose they had been present, and had succeeded in surcharging Keichline with the rents they now claim ought to have been collected; no part of the fund even thus increased would possibly have come to them. The total rents, as set out in appellant’s Schedule B, amount to $2,877, or, with interest to filing of account, in round numbers, $3,550, which added to the net fund for distribution as stated by the accountant would make $7,165. The claims of the mortgage creditors amounted to $5,358, with interest, so far as the evidence shows, for an average period of about eight years and a half, which would bring the amount up to about $8,000, or more than enough to take the whole fund, with the surcharge included ; and, as already noted, if on closer calculation there had appeared any surplus, it would have gone, not to appellants, but first to the assignees for the benefit of creditors, and secondly to the administrator of Edward Helfenstoin, whose estate was insolvent. If, therefore, as already said, the appellants had been present, and had succeeded in establishing everything that they now claim, It is beyond question that nothing possibly could have come to them from this property, and they have no standing now to demand an account.

Decree affirmed.