McMullin v. Westinghouse Estate

Supreme Court of Pennsylvania January 7, 1918

McMullin v. Westinghouse Estate, 259 Pa. 281 (Pa. 1918)

103 A. 57; 1918 Pa. LEXIS 406

Brown, Frazer, Moschzisker, Potter, Walling

Opinion of the Court

Per Curiam,

The complaint of the appellants in seeking to impose liability upon the estate of George Westinghouse, deceased, is that his acquisition of the assets of the Security Investment Company constituted and was a breach of the relationship of trust and confidence in which he stood to them, and was a fraud in law and equity upon their *290rights. The thirty-fifth fact found by the learned chancellor below, at the request of the appellees, is: “Mr. Westinghouse did not at the time of any of the purchases made by him from the Security Investment Company occupy any relation of trust or confidence to the company with reference to said ‘sales, or any of them, nor did he have any voice or exercise any influence as to the amount of money which the Security Investment Company was willing to take for said property or any of it.” This fact, justified by the evidence, put an end to complainants’ case. The material facts appear in the opinion of the court below dismissing the bill, and, on that opinion, subsequently immaterially modified as to the third finding of fact, the decree is affirmed at the costs of the appellants.

Reference

Cited By: 1 case
Status: Published
Syllabus: Corporations — Management by creditors — Sale of assets — Purchase by sole stockholder and president — Alleged fraud — Trusts and trustees — Bill in equity — Dismissal. A bill in equity brought by certain creditors of a corporation sought to impose liability on a decedent’s estate on the ground that the decedent’s acquisition of the assets of the corporation was a breach of the relationship of trust and confidence in which he stood to complainants, and fraudulent. It appears that deceased had been president of the corporation and owner of all its stock. The corporation was placed in the hands of a receiver and thereafter the creditors perfected a plan, in which complainants joined, under which the receiver was discharged and the creditors controlled the company, naming six of its nine directors, and managed its affairs by an executive committee composed of three of the six directors they had appointed. The company was unable to meet its obligations and its securities were sold at public auction, and were purchased by deceased as the highest bidder. The court found on amply sufficient evidence that after the creditors assumed control deceased took no part in the affairs of the company and had no control over them, and that deceased did not procure the sale to be made and possessed no means to prevent its taking place. Held, (1) the mere fact that deceased was the sole stockholder did not render the transaction a fraud, (2) no relationship of trust and confidence existed between deceased and complainants at the time of the sale, and (3) the bill was properly dismissed.