Brown v. Strom

• Decision Date: 16 December 1910
• Citation: 129 N.W. 136,113 Minn. 1
• Parties: BROWN et al. v. STROM et al.
• Court: Minnesota Supreme Court

113 Minn. 1

129 N.W. 136

BROWN et al.

v.STROM et al.

Supreme Court of Minnesota.

Dec. 16, 1910.

Appeal from District Court, Jackson County; James H. Quinn, Judge.

Action by Pluma M. Brown, by his guardian, and others, against Herman L. Strom and others, executors of John K. Brown. Judgment for plaintiffs, and defendants appeal. Modified and remanded, with directions.

Syllabus by the Court

Plaintiffs' complaint set forth: Decedent owned 210 out of 400 shares in defendant bank. The executor of his estate, who was also cashier of the bank, conspired with the other named defendants to part with control of the bank by the sale of 30 of those shares to Strom's friends, defendants herein, at an inadequate price. This sale was made nearly two months before the time for filing claims against the estate would expire. Plaintiffs were ready and had arranged to procure funds to discharge the obligations of the extate. These allegations were controverted. The district court restrained various individual defendant from disposing of their bank stock and the bank from recognizing any assignment. It is held:

A probate court is a court of record and has original and exclusive jurisdiction in the administration of the affairs of deceased persons. An executor has the right of possession of the personal estate of decedent and the power to dispose thereof.

The district court, as a court of chancery, may not interfere with the exercise of the constitutional powers of the probate court, but in the interest of justice may exercise and ancillary jurisdiction, to aid the probate court in the performance of its proper functions.

In the case at bar it was competent for the district court, in order to preserve the property in statu quo, to restrain the executor as an individual and other stockholders and the bank from disposing of shares of stock in that bank involved in the proper administration of the estate. Knox & Faber and Dunn & Carlson, for appellants.

E. H. Nicholas and Putnam & Nicholsen, for respondents.

JAGGARD, J.

The complaint of plaintiffs and respondents set forth: Plaintiffs are the widow and only heirs of John K. Brown, deceased. Under Brown's will, defendant Strom and one Haugen were made executors. Haugen resigned, but petitioned the probate court to appoint the widow of deceased as coexecutor, to act jointly with Strom. Strom, Haugen, and deceased had been intimate friends. Notwithstanding this situation, the widow was not appointed executor, and Strom served alone. The decedent owned 210 out of the 400 shares of the capital stock of the defendant bank. Nearly two months before the time for filing claims against the Brown estate would expire, Strom sold 30 shares of the capital stock of the Brown estate to the defendants Cowing and Knox, who were directors of the bank, and, respectively, president and vice president thereof. This was pursuant to a conspiracy between them to deprive plaintiffs of control of the bank, and to transfer that control to Strom and his friends. The price paid was only $105.75 per share; whereas, in fact, the value was $125 per share. This sale was made, despite the protest of the plaintiffs, made to the probate judge, and despite notice to Strom that the said plaintiffs were ‘ready and willing to advance all money on demand that might be necessary to meet any claims or obligations of any kind or nature of the estate that required to be properly met, and that they had arranged to procure the funds in order to make good these representations.’ The sale and transfer of this stock lost the estate the control of the affairs of the bank, to the profit of Strom and his conspirators, was wholly unnecessary in the due administration of the estate, and would work great and irreparable injury to the estate. The complaint prayed for a temporary injunction.

The defendants, inter alia, denied the conspiracy, and asserted that the sale of the stock and its purchase were in good faith, and that its proceeds were needed and used to defray the actual bona fide indebtedness of the estate. They insisted, further, that the plaintiffs were not entitled to relief, that there was defect of parties defendant, and that th court had no jurisdiction.

The complaint was supported and opposed by affidavits. Thereupon the trial court found facts in accordance with the plaintiffs' contentions, and granted a temporary injunction, whereby defendants Knox and Cowing were restrained from disposing of the shares of stock which they had purchased from the executor, and Strom, the executor, was restrained from disposing of any of the remaining 180 shares, Strom as an individual from disposing of any of his 50 shares, and the bank itself was restrained from disposing of any stock in the name of the estate, or of the defendant as executor of the estate. From this order the defendants appealed.

1. The principal contention of the defendants is that the district court was without jurisdiction to entertain the complaint and to grant the relief. ‘By this judicial raid upon the jurisdiction of the probate court * * * the district court * * * lays its hands upon the executor and determines what personal property he shall sell and what he shall not sell.’ The defendants refer in this connection to many cases in which the exclusive character of the jurisdiction of the probate court is sustained. See Cone v. Hooper, 18 Minn. 531 (Gil. 476); Jacobs v. Fouse, 23 Minn. 51;State v. Ueland, 30 Minn. 277, 15 N. W. 245;State v. Probate Court, 33 Minn. 94, 22 N. W. 10;Wiswell v. Wiswell, 35 Minn. 371, 29 N. W. 166;Culver v. Hardenbergh, 37 Minn. 225, 33 N. W. 792;Reiser v. Gigrich, 59 Minn. 368, 61 N. W. 30;Boltz v. Schutz, 61 Minn. 444, 64 N. W. 48;Starkey v. Sweeney, 71 Minn. 241, 73 N. W. 859;O'Brien v. Larson, 71 Minn. 371, 74 N. W. 148;Betcher v. Betcher, 83 Minn. 215, 86 N. W. 1;Duxbury v. Shanahan, 84 Minn. 353, 87 N. W. 944;Appleby v. Watkins, 95 Minn. 455, 104 N. W. 301; Gary's Probate Law (3d Ed.) §§ 565 and 566; Rev. Laws 1905, §§ 3705-3766; Steel v. Holladay, 20 Or. 70, 25 Pac. 69,10 L. R. A. 670;Adams v. Petrain, 11 Or. 304, 3 Pac. 163.

It is clearly settled on the ond hand: The probate court in this state is a court of record of original jurisdiction, and as such has exclusive jurisdiction of the administration of the estate of deceased persons. Under the orders of the probate court, an executor has power to dispose of the goods and chattels of the deceased. No heir or beneficiary can hold or retain possession of such portions of the personal estate as he may assert or claim title to. To so permit would lead to such confusion as would bring disaster to the probate court. The jurisdiction of the district court with respect to administration by the probate court ordinarily is appellate only. The probate court has the power in appropriate cases, on proper application, to direct its officers as executors. See Cone v. Hooper, 18 Minn. 531 (Gil. 476); Wiswell v. Wiswell, 35 Minn. 371, 29 N. W. 166;Culver v. Hardenberg, 37 Minn. 235, 33 N. W. 792;Starkey v. Sweeney, 71 Minn. 241, 73 N. W. 859;Jacobs v. Fouse, 23 Minn. 51;State v. Ueland, 30 Minn. 277, 15 N. W. 245;O'Brien v. Larson, 71 Minn. 371, 74 N. W. 148;Boltz v. Schutz, 61 Minn. 444, 64 N. W. 48;Betcher v. Betcher, 83 Minn. 215, 86 N. W. 1;Appleby v. Watkins, 95 Minn. 455, 104 N. W. 301;Graffan v. Ray, 91 Me. 234, 39 Atl. 569;Steel v. Holladay, 20 Or. 70, 25 Pac. 69,10 L. R. A. 670.

On the other hand, there is a primary difference between the jurisdiction, the positive powers, and the machinery of a general court of equity, and of a mere probate court, in general, and under the laws of this state in particular. The law is concerned not so much with working out an abstract and ideal harmony with respect to the limits of this dual jurisdiction as it is with the efficient administration of practical justice thereby. When a situation presents itself to which in its nature a probate court is not equal, a court of equity may step in and see that justice is done. This it can do without trespassing at all on the constitutional authority of the probate court, and without any interference with the due administration of an estate of a decedent. There need be no conflicting judgment or orders. As to matters properly within its jurisdiction, the probate court is supreme, and its decrees are given conclusive force, subject, of course, to appeal. But a court of equity may effectuate, without in any wise controverting, such decrees; that is, if occasion arises, a chancellor may act in aid of a probate court, and make possible the proper performance of its functions in administering an estate by preserving that estate. The jurisdiction of the equity court in such cases is ancillary to that of the probate court. There need be no conflict, nor interference, but merely assistance. Doubtless such occasions are rare; but their infrequency is no argument why equity should not afford a remedy for the wrong when the situation arises.

In the case at bar, upon the assumption of the truth of the facts stated-and we wish to make it clear upon that assumption only, and not upon a determination that the merits are with the plaintiff-a state of facts was presented for which the probate judge could provide no adequate remedy. Defendants Knox and Cowing were clearly beyond the jurisdiction of that court. They were total strangers to the estate. Less clearly, both Strom as an individual and the bank were beyond the reach of the instrumentalities available to the probate court. Strom, as executor, it could control and direct. Proceeding further upon this assumption, we think that the complaint clearly made out a case for equitable interference, to prevent the loss of control of the bank by the plaintiffs through the conspiracy of the defendants and for an inadequate price. The district court had jurisdiction to preserve the estate for administration by the probate court; i. e., to maintain the status...