Eddy's Estate, In re, s. 31-36

• Decision Date: 13 October 1958
• Docket Number: Nos. 31-36,s. 31-36
• Citation: 92 N.W.2d 458,354 Mich. 334
• Parties: Matter of the ESTATE of Arthur D. EDDY, Deceased. Appeals by Cynthia Mills CLEVELAND.
• Court: Michigan Supreme Court

Page 458

92 N.W.2d 458

354 Mich. 334

Matter of the ESTATE of Arthur D. EDDY, Deceased.

Appeals by Cynthia Mills CLEVELAND.

Nos. 31-36.

Supreme Court of Michigan.

Oct. 13, 1958.

William Alfred Lucking, Detroit, for appellant.

John D. Currie, Saginaw, Gilbert A. Currie, Midland, Thomas G. Long, Detroit, for appellees.

Before the Entire Bench.

KELLY, Justice.

Arthur D. Eddy, a resident of Saginaw, died April, 1925, leaving a will and an estate valued at over $3,000,000. The ninth paragraph of the will created a trust of 1/3 of the estate to continue during the live, of Laura S. Eddy and Lila Eddy Doebler with remainder on the death of the survivor 1/2 to 'my said niece, Cynthia Mills Cleveland, if surviving,' or, if she were not surviving to her issue, and the other 1/2 to a charitable trust under paragraph 10 of the will.

A bill of complaint was filed in the Saginaw circuit court on June 8, 1934, by the trustee (Second National Bank & Trust Company of Saginaw) seeking a construction of the will, and appellant, Cynthia Mills Cleveland, was named defendant as remainderman. She removed the case to the Federal court and filed a cross bill charging that the trustee's negligence caused the trust estate to suffer large losses and, further, that the bank had used moneys belonging to the trust for the benefit of the bank.

On February 7, 1939, appellant's cross bill was dismissed and, in addition to taxable costs, the bank's litigation expenses were charged against appellant's interest in the trust. From this dismissal and order, appellant appealed, with a companion case, to the United States court of appeals, 6th circuit, and the judgments were affirmed February 14, 1941 (Van Auken v. Second National Bank & Trust Co. of Saginaw, 117 F.2d 938, 1009); later certiorari was denied by the United States supreme court on June 2, 1941 (313 U.S. 593, 594, 61 S.Ct. 1118, 1119, 85 L.Ed. 1547).

To understand this appeal the writer of this opinion deems it advisable to set forth a brief and condensed history of litigation that followed:

November 28, 1941: Appellant filed her petition in Saginaw probate court seeking delivery of her legacy and final accounting and for an order disregarding the Federal court's judgment. The probate court denied her petition and appellant appealed to the circuit court where the probate court's order of dismissal was affirmed. Appellant appeals to this Court and said appeal is now before us as 1 of 5 appeals that have been consolidated as one general appeal.

January 15, 1942: Appellant filed her bill of complaint in the Saginaw circuit court seeking a trial de novo on all issues submitted to and determined by the Federal court. The trustee bank sought and obtained a writ of prohibition, which was granted by this Court (Second National Bank & Trust Co. of Saginaw v. Reid, 304 Mich. 376, 8 N.W.2d 104). Appellant's petition for certiorari was denied by the United States supreme court on October 11, 1943 (320 U.S. 745, 64 S.Ct. 48, 88 L.Ed. 443).

August 24, 1945: The bank filed a bill in the Saginaw circuit court for partition of the real estate as between the tenth paragraph trust, testator's widow and the beneficiaries of the ninth paragraph trust. Cynthia Mills Cleveland appeared, contested the proceeding and, after decree entered February 13, 1947, took an appeal to the Michigan Supreme Court. She later took the portion partitioned to her and dismissed the appeal. Her portion was of an approximate value of $180,000.

November 8, 1945: Order entered by the Saginaw probate court, counsel for Cynthia Mills Cleveland being present, for distribution of the assest of the ninth paragraph trust except $100,000 par value of United States obligations belonging to the trust 'as security for any sums which said testamentary trustee shall be finally held to be entitled to charge against or have reimbursement for out of the assets of said trust.' The order was expressed to be without prejudice to the claims and contentions of Cynthia Mills Cleveland therein referred to. The assets so dealt with had a then value of $700,000 nearest round figure, including the 1/6 interest in the real estate partitioned as stated above. All of said assets, except said $100,000, have been taken by said Cynthia Mills Cleveland.

November 24, 1945: Saginaw probate court, after hearing, allowed the annual accounts of the bank as trustee and fixed the fee of trustee. This order was appealed and the circuit court's approval is now on appeal to this Court.

January 22, 1946: Appellant filed her bill of complaint in the Wayne circuit court, alleging that the Saginaw probate court was without jurisdiction to enter the orders of November 8th and November 24th, above referred to, and seeking a mandatory injunction requiring the bank to turn over the $100,000 retained. The bank filed a petition for writ of prohibition against further proceedings in Wayne county, which was granted by this Court on April 6, 1948 (Second National Bank & Trust Co. v. Wayne Circuit Judge, 321 Mich. 28, 32 N.w.2d 34).

May 26, 1948: Appellant filed a bill in the Saginaw circuit court asking that the probate court be prohibited from proceeding further in regard to paragraph nine of the trust. This is now before us on appeal.

June 14, 1948: Appellant filed in the Saginaw circuit court a petition for mandamus seeking to compel the probate judge to vacate the orders of November 8th and November 24th, referred to above. This matter is now before us on appeal.

March 16, 1950: Appellant filed a bill in the Saginaw circuit court charging the officers and attorneys of the bank with fraud and wrongdoing in the administration of the ninth paragraph of the trust, and seeking to hold them personally liable. This suit is still pending in the circuit court.

August 21, 1950: Appellant filed petition in probate court to surcharge the bank as trustee. Petition denied by both the probate court and the circuit court, and now on appeal to this Court.

May 21, 1956: Bill filed in Saginaw circuit court against trustee, involving the $100,000 fund granted to the bank as security. This case is still pending and is not on appeal here.

Five cases are on appeal here, as noted above. These cases were all pending in the Saginaw circuit court and were disposed of by the October 28, 1957, decree and subsequent orders. Claims of appeal were filed here on November 18, 1957.

Appellant Contends the Saginaw Probate Court Did Not Have

Jurisdiction To Approve the Accountings and Make

Allowances As Contained In the Order of

November 24, 1945.

Ten years after testator's death, the administration was closed by the probate court's order of May 10, 1935. Approximately 1 year previous (June 8, 1934) the bank sought a construction of the will in the circuit court and appellant removed the case to the Federal court on the grounds of diversity of citizenship and filed her cross bill, as referred to above. Through appellant's activities this Federal court action did not terminate until June 2, 1941, when the United States supreme court denied relief. Between June 2, 1941, and January 28, 1946, when appellant filed her bill of complaint in the Wayne circuit court, we have noted above the litigation caused by appellant filing petition in the probate court and bills of complaint in the Saginaw circuit court, or her appeals to the circuit court, Supreme Court, circuit court of appeals and the United States supreme court.

The Wayne circuit court action resulted in this Court granting a writ of prohibition, which definitely established the jurisdiction of the Saginaw probate court and that court's right to enter the November 24, 1945, order, as is established from the following, set forth in the judgment (321 Mich. 28, 32 N.W.2d 34):

'The probate court for the county of Saginaw at the time of the entry of its orders of November 8, 1945, and November 24, 1945, in the matter of the trust under the ninth paragraph of the will of Arthur D. Eddy, deceased, had sole and exclusive jurisdiction as against all other courts at law or in chancery of the State of Michigan to hear and determine all questions and matters remaining open between the parties to said trust in relation to the administation of said trust, the handling of the assets and funds thereof, the accounting by the trustee for its acts and doings, expenditures and disbursements made, the allowance of compensation to the trustee and the tiem and manner of distribution of the property of said trust and the closing thereof; and said probate court will continue to have such sole and exclusive jurisdiction until said trust shall be finally closed on the records of said probate court save only as appeal to the circuit court for the county of Saginaw (in manner and effect as provided by statute) has been heretofore taken from said order of November 24, 1945, or may be taken from any order hereafter made by said probate court in the premises.'

In Second National Bank & Trust Co. v. Wayne Circuit Judge, 321 Mich. 28, 41, 32 N.W.2d 34, 39, this Court stated:

'It appears that after the Federal court judgment of February 7, 1939, had been affirmed on appeal by the United States circuit court of appeals on February 14, 1941, and certiorari denied by the United States Supreme Court on June 2, 1941, Mrs. Cleveland on November 28, 1941, filed a petition in the Saginaw county probate court for an order requiring the bank as trustee to make immediate delivery of all trust assets then in possession of the bank due her. It also appears that under the Federal court judgment there was a provision for retention of the shares of stock of C. K. Eddy & Sons until such expenses and disbursements had been determined and paid. * * *

'The above order was an adjudication that the probate court of Saginaw county could not order something done contrary to the unperformed provisions of the Federal court judgment. It was not an adjudication that the probate court could...