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MEYERSON v. MALINOW

March 4, 1957

M. W. MEYERSON, AS EXECUTOR OF THE WILL OF SADIE MALINOW, DECEASED, RESPONDENT-APPELLANT,
v.
IRVIN BROWN MALINOW AND STANLEY D. MALINOW, INDIVIDUALLY AND AS TRUSTEES UNDER THE WILL OF MAYER MALINOW, AND SOUTHERN IRON & METAL COMPANY, INC., APPELLANTS-RESPONDENTS.



The opinion of the court was delivered by: Moss, Justice.


   March 4, 1957.
The record shows that Mrs. Sadie Malinow and Mayer Malinow were married on December 14, 1939, and lived together as husband and wife until his death on January 21, 1950. For a few years after their marriage the parties lived in a home on Mills Avenue. In 1942 they built a much nicer home on Otis Boulevard. At the time of the construction of the new home, Mrs. Malinow paid for the lot, taking title in her name. It does not appear from the record how much each contributed to the construction of this residence or for the fixtures and furnishings therein. It does appear that it was necessary for them to obtain a construction loan with the Liberty Life Insurance Company. The record reveals that the loan was for a period of fifteen years, with monthly payments amounting to $71.

It also appears that at one time Mayer Malinow owned the full and complete capital stock of Southern Iron & Metal Company, but prior to his death he had given to his two sons, David Malinow and Irvin Brown Malinow, two-thirds of the capital stock of said corporation, and at the time of his death Mayer Malinow owned a one-third of the said capital stock.

Mayer Malinow died testate, and by the terms of Item 2 of his will, he provided as follows:

"I give and bequeath unto my two sons, Stanley David Malinow and Irvin Brown Malinow, in equal shares, all the capital stock of Southern Iron & Metal Company, Inc., which I may own at my death. As a charge upon such stock (but upon no other asset of my estate), I direct that my said sons pay to my wife, Sadie Malinow, or cause to be paid to her by Southern Iron & Metal Company, Inc., the sum of Fifty ($50.00) Dollars a week accumulated from my death, as long, during her life or widowhood, as she shall reside in Spartanburg County. No duty or responsibility with respect to the making of these payments to my wife is placed upon my executors as such, it being my expressed intention to confine this obligation personally to my sons against whose bequest of stock it is made a charge. No other provision is made for my wife in this Will, for the reason that I have heretofore given her a residence on Otis Boulevard in Spartanburg."

David Malinow and Irvin Brown Malinow are sons of Mayer Malinow by a previous marriage. Hence, they are the stepsons of Mrs. Sadie Malinow. It appears that these two sons, pursuant to the terms of the Will of Mayer Malinow, received one-third of the capital stock of Southern Iron & Metal Company, Inc., thereby giving them, share and share alike, full ownership of all the capital stock of the corporation. It is admitted that from the date of the death of Mayer Malinow until March 26, 1955, that these two sons carried out the terms of Item 2 of the aforesaid Will, by paying to their stepmother, Mrs. Sadie Malinow, the sum of $50 per week.

This action was commenced on May 16, 1955, by Mrs. Sadie Malinow, against her two stepsons, Irvin Brown Malinow and Stanley David Malinow, individually and as Trustees under the will of her husband, Mayer Malinow, deceased, and the Southern Iron & Metal Company, a corporation, wherein she sought the aid of the Court in requiring the said parties to resume the payment to her of the weekly sum of $50, which they had refused to pay after March 26, 1955. She also demanded that a receiver be appointed for the corporation to assure the continuation of the payments; to collect from the defendants a reasonable attorney's fee; and to recover actual and punitive damages for the defendants' failure to continue the weekly payments.

The defendants, who are appellants here, filed an Answer which is essentially a general denial. By way of setoff and counterclaim, they asserted claims against Mrs. Sadie Malinow totalling $16,544.50, which said amount the defendants assert that they advanced to her, or paid to others, at her request, for the plaintiff's use and benefit. The defendants also assert that they are entitled to setoff the sum so paid and advanced by them against the sums which Mrs. Malinow is entitled to under the will. Mrs. Sadie Malinow plead a general denial to the defendants' counterclaim.

This action was, by consent of all parties, referred to the Master of Spartanburg County for the purpose of taking the testimony and reporting his findings of fact and law. He held three references, and on December 12, 1955, filed his Report in which he recommended that judgment be rendered in favor of Mrs. Sadie Malinow in the amount of $1,900, representing the arrearages in weekly payments. He denied the defendants' setoff and counterclaim on the ground that these sums were gifts to the said Mrs. Sadie Malinow and did not constitute a debt by her to the defendants. He also recommended that the claim for reasonable attorney fees be denied and that the cause of action for actual and punitive damages for the defendants' failure to continue the weekly payments be dismissed on the ground that no fiduciary relationship existed between the parties, for a breach of which the defendants would be liable in tort.

The Report of the Master, to which exceptions were taken by all parties, was confirmed by a Decree of the Honorable Charles M. Pace, Judge of the Spartanburg County Court. From this Decree all parties have appealed to this Court.

Mrs. Sadie Malinow, plaintiff in the action as it originated, died during the pendency of this action, and the executor of her will, M.W. Meyerson, was duly substituted as a party in her stead. However, the record shows that Mrs. Malinow had testified at the references held by the Master.

Irvin Brown Malinow and Stanley D. Malinow assert by their appeal that the trial Judge was in error in holding that the items constituting the account of $16,544.50 were gifts and not loans. M.W. Meyerson, as executor of the will of Mrs. Sadie Malinow, appeals on the ground that the trial Judge erred in dismissing the cause of action for actual and punitive damages because a fiduciary relationship existed between the parties, rendering Irvin B. Malinow and Stanley D. Malinow liable for such damages, because of their willful, arbitrary and capricious manner in refusing to carry out their duties and obligations under the will of Mayer Malinow.

The parties to this action were not in agreement as to whether the action was legal or equitable in nature. However, the County Judge held that the action was an equitable one and that he had a right to review the record on exceptions from the Master's Report. There is no exception challenging this holding of the lower Court. Therefore, the County Judge's ruling became the law of the case and this Court is bound by it. Mellette v. Atlantic Coast Line R. Co., 181 S.C. 62, 186 S.E. 545; Erwin v. Patterson, 229 S.C. 188, 92 S.E.2d 464; Davis v. Palmetto Quarries Co., 212 S.C. 496, 48 S.E.2d 329. Therefore, we must consider this action as properly being one of an equitable nature.

As is heretofore stated, the Master and the County Judge concurred in a finding of fact that the advances made by Irvin B. Malinow and Stanley D. Malinow to, or in behalf of, Mrs. Sadie Malinow were gifts. This being true we are bound by the rule that in an equity case the findings of fact by a Master and concurred in by the County Judge are conclusive upon this Court and will not be disturbed unless it is shown that such findings are without any evidence to support them or are against the clear preponderance of the evidence. Newton v. Batson, 223 S.C. 545, 77 S.E.2d 212; Archambault v. Sprouse, 218 S.C. 500, 63 S.E.2d 459; Dean v. Dean, 229 S.C. 430, 93 S.E.2d 206.

The evidence taken by the Master is in direct conflict. It appears that Mrs. Sadie Malinow, at the time of the death of her husband, was living in comparative luxury for one in her station in life. She owned a nice home, had a maid, a car, and upon the death of her husband she was greatly concerned when she learned that she had been left only $50 per week. It appears also that Mayer Malinow was buried in Baltimore, Maryland, and that at the Emerson Hotel, just after Mayer Malinow's funeral, that there was a discussion as to what would happen to Mrs. Malinow. Mrs. Goldstein, a sister of Mrs. Malinow, testified:

"We were in the hotel in her room and my sister was crying and very much upset and they (Irvin and Stanley) walked over to my sister and said, `Aunt Sadie, don't cry, you have nothing to worry ...


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