Am. Sur. Co. of N. Y. v. Wilson

• Decision Date: 09 April 1935
• Docket Number: Case Number: 23590
• Citation: 44 P.2d 35,172 Okla. 107,1935 OK 377
• Parties: AMERICAN SURETY CO. OF N. Y. v. WILSON, Adm'r.
• Court: Oklahoma Supreme Court

1935 OK 377

44 P.2d 35

172 Okla. 107

AMERICAN SURETY CO. OF N. Y. v. WILSON, Adm'r.

Case Number: 23590

Supreme Court of Oklahoma

Decided: April 9, 1935

Syllabus

¶0 1. Executors and Administrators--County Court Without Authority to Try Question of Ownership of Property Claimed by Administrator in His Individual Right.

A county court, in the exercise of its probate jurisdiction, is without authority to try controverted questions of the right to property between the administrator of an estate in his individual right and other parties interested in the estate.

2. Same--Scope of Jurisdiction--Order Finding Estate and Charging Amount Cannot Be Made Basis of Suit by Estate on His Bond.

Where an administrator of an estate claims a certain fund adversely to the rights of the estate, the county court may conduct an investigation of such claims, but an order resulting from the investigation finding title in the estate and purporting to charge the administrator with said fund cannot be made the basis of a suit by the estate against the surety on the administrator's bond.

Appeal from District Court, Kay County; John S. Burger, Judge.

Action by R. O. Wilson, administrator of the estate of Alfred Heinemann, against the American Surety Company of New York. Judgment on pleadings for plaintiff, and defendant appeals. Reversed.

Howard Johnson and Tomerlin & Chandler, for plaintiff in error.

Rittenhouse, Webster & Rittenhouse and Felix Duvall, for defendant in error.

GIBSON, J.

¶1 Plaintiff in error was defendant and defendant in error was plaintiff in the trial court. They will be referred to herein as they appeared at the trial.

¶2 On the 13th day of September, 1929, one Sol Heinemann, also known as S. Heinemann, was appointed administrator of the estate of Alfred Heinemann, deceased, and the defendant surety company became the surety on his bond in the sum of $ 6,000. Sol Heinemann was also the guardian of Bernice Heinemann, a minor, under appointment by a court of another state. The deceased held life insurance policies with certain companies aggregating the sum of approximately $ 11,000.

¶3 These policies were collected by S. Heinemann on behalf of the beneficiary, Bernice Heinemann.

¶4 Upon the petition of a creditor of the estate of the deceased, the administrator was cited into court, where an order of the court resulted which is in part as follows:

"It is further found that certain life insurance policies on the life of the decedent existed in full force and effect at the time of his death, which deceased, in his lifetime, attempted to change the beneficiaries therein provided which, if unchanged, the proceeds of same would revert to his estate at his death, and that said attempted change of beneficiaries were not consummated under the terms of said policies before his demise, but, notwithstanding the uncompleted change of beneficiaries, the proceeds of same were paid to Sol Heinemann as guardian of Bernice Heinemann, and that the administrator holds the sums of money received from said life insurance policies as the guardian of said Bernice Heinemann.

"That the attempted change of beneficiaries, not consummated before the death of the decedent, failed to take the proceeds of said policies out of the decedent's estate, and the administrator should recover the same for the estate by whatever means necessary to preserve the assets of the estate.

"Finally, it is found that the present administrator, Sol Heinemann, by reason of his conflicting interests as guardian and administrator, is unable to pursue and follow the proper procedure for recovering assets belonging to the estate of Alfred Heinemann, and that he should be removed and some proper person appointed to marshal the assets of the estate, settle with its creditors and close the same."

¶5 Heinemann was ordered to file an account. The order was dated April 20, 1931. The administrator was removed June 9, 1931, and the plaintiff was immediately appointed as his successor.

¶6 The order of June 9th removing Heinemann is as follows:

"Now, on this 9th day of June, 1931, the above matter comes on for hearing pursuant to the order of April 20, 1931, and the final account of Sol Heinemann, as administrator of the said estate, and the court, after hearing the same and in pursuance to said order, finds that said Sol Heinemann should be removed as administrator of the estate of Alfred Heinemann, deceased.

"It is, therefore, considered, ordered and adjudged by the court that Sol Heinemann be, and he is hereby, removed as administrator of the estate of Alfred Heinemann, deceased, subject to the provisions set out in the order of April 20, 1931. Said Sol Heinemann is directed to pay over to R. O. Wilson the sum of $ 1,714.76, upon the said Wilson's qualification."

¶7 The plaintiff, as administrator of the estate of Alfred Heinemann, deceased, commenced an action in the district court of Kay county against the defendant as surety on Sol Heinemann's bond to collect from said surety the sum so found due to the estate by the order of the county court of April 20, 1931, to the extent of $ 6,000, being the full amount of the bond.

¶8 Defendant answered alleging that Sol Heinemann received the proceeds of the life insurance policies on behalf of his ward, Bernice Heinemann, and not as administrator of the estate of the deceased, and that the proceeds were never reported as assets of the decedent's estate. The answer further pleads the settlement of Heinemann's final account by the county court and the court's order approving same, and that Heinemann has paid to his successor, the plaintiff, the full amount found due from him to said estate. The material parts of the order approving the account are as follows:

"* * * The court * * * finds that the final account of said administrator, in so far as it reflects and accounts for the funds and property therein set forth belonging to said estate and the disbursements therein recited, should be approved and confirmed.

"It is therefore, ordered, adjudged, and decreed that the final account of Sol Heineman, administrator of the estate of Alfred Heinemann, deceased, in so far as it reflects and accounts for the funds and property therein described and the disbursements therein recited, be and the same is hereby approved."

¶9 Defendant's general demurrer, which also questioned the jurisdiction of the court, was overruled. Plaintiff moved for judgment on the pleadings, which was sustained, and judgment entered against defendant for $ 6,000, and the defendant appealed.

¶10 The order of the county court dated April 20, 1931, upon which this action is based, was issued by the county court under its probate jurisdiction as authorized by section 1220, O. S. 1931, which is a statute authorizing procedure in such court for the purpose of discovering assets of an estate pending administration. It provides that the administrator, or any other interested person, may seek a citation against another suspected of concealing or disposing of money or other property belonging to the estate, and provides for hearing before the court upon the matter. An order issued in such a proceeding where the question of ownership is in issue does not determine such issue, and does not have the effect of fixing liability for the conversion of property belonging to an estate.

¶11 In the case of Farmers' Bank & Trust Company v. Sheffler, 78 Okla. 44, 186 P. 479, it was held as follows:

"The purpose of the proceedings provided for by Rev. Laws 1910, sections 63256327 (1220-1222, O. S. 1931), is to make discovery and compel production of property of an estate suspected of having been concealed, embezzled, or conveyed away, but it cannot be employed to enforce the payment of a debt or liability for the conversion of property of an estate or to try to controverted questions of the right to property Its between the representative of the estate, and others."

¶12 In a recent case, In re Cline's Estate, 169 Okla. 565, 38 P.2d 30, decided by this court in November, 1934, the court, in defining the powers of the county court under sections 1220-1222, supra, stated:

"These sections of the statute provide only for a special proceeding for discovery of property belonging to an estate. * * * The only order which a county court is given authority to issue on such a proceeding is one to compel disclosure of knowledge of the person cited as to such assets. Further than this the county court has no jurisdiction. * * *"

¶13 The petition for citation against Heinemann specifically charged that Heinemann had converted certain assets of the estate. The question of conversion was the issue involved. It was determined adversely to Heinemann. The county doubt found that the insurance money belonged to the estate and Heinemann disputed that finding, and there the jurisdiction of the county court on that proceeding ended. However, the judge of the court evidently knew the effect of his order, that it did not amount to a fixed liability against Heinemann, for in his order he found as follows:

"Finally, it is found that the present administrator, Sol Heinemann, by reason of his conflicting interests as guardian and administrator, is unable to pursue and follow the proper procedure for recovering

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