First Nat. Bank & Trust Co. of Marquette v. Albert, Docket No. 22244

• Decision Date: 10 December 1975
• Docket Number: Docket No. 22244
• Citation: 66 Mich.App. 252,238 N.W.2d 827
• Parties: FIRST NATIONAL BANK & TRUST COMPANY OF MARQUETTE, Michigan, Executor of the Estate of George Albert, Deceased, Plaintiff-Appellee, v. Samuel G. ALBERT, M.D., and Fred G. Albert, D.P.M., Defendants-Appellants. 66 Mich.App. 252, 238 N.W.2d 827
• Court: Court of Appeal of Michigan — District of US

Page 827

238 N.W.2d 827

FIRST NATIONAL BANK & TRUST COMPANY OF MARQUETTE, Michigan Executor of the Estate of George Albert, Deceased Plaintiff-Appellee, v. Samuel G. ALBERT, M.D., and Fred G. Albert, D.P.M. Defendants-Appellants.

Docket No. 22244.

66 Mich.App. 252, 238 N.W.2d 827

Court of Appeals of Michigan.

Dec. 10, 1975.

Rehearing Denied Jan. 15, 1976.

Released for Publication March 2, 1976.

[66 MICHAPP 253] Kenney, Kenney, Chapman & Prather, by Arthur W. Miller, Bloomfield Hills, for defendants-appellants.

Kendricks, Bordeau & Casselman, by Robert M. Bordeau, Marquette, for plaintiff-appellee.

Before ALLEN, P.J., and DANHOF and CAVANAGH, JJ.

ALLEN, Presiding Judge.

The instant conversion suit brings to the Court's attention another appeal in a series of litigation involving the Albert family of Ironwood, Michigan. To our knowledge, no family has contributed so much to the length of the bookshelves of the Michigan Bar. ¹

The facts concern the last year of the life of George Albert who died on November 24, 1970, at age 82, leaving by will an estate of approximately $250,000 to be equally divided among his 10 children. From a judgment in favor of the executor requiring repayment to the estate of $33,400.00, plus interest, defendants appeal.

George Albert was a remarkable, independent, irascible, and affluent man. He imparted his fierce independence and much of his affluence to the siblings who participated in the instant family [66 MICHAPP 254] squabble: Samuel Albert, a physician in Ironwood; Fred Albert, a doctor of podiatry in Austin, Minnesota; John Albert, who owns the family clothing store; James Albert, a doctor of podiatry in Ironwood; Michael Albert, who worked in the family clothing store; and La Mese K. Davies. During the summer of 1969, the aged and terminally ill George Albert returned from the hospital at Duluth, Minnesota to his home in Ironwood. John Albert lived with George in the family home until December 22, 1969, and, up until October 21, 1970, took care of the father's business under a power of attorney.

By mid-December, 1969, George's health had deteriorated to the extent that family members agreed that Samuel Albert ought to take care of their father. Dr. Sam agreed to the assignment on the condition that he would be reimbursed for his services and that there would be no interference by other members of the family. From December 22, 1969, to his father's death on November 24, 1970, Dr. Sam cared for his father, charging $73,882.80 for services rendered. John Albert, acting under his then power of attorney, paid $26,876.12 to Sam during George's lifetime, leaving $47,606.75 due from the estate. The balance due has become the subject of litigation currently on appeal to this Court. ² Dr. Sam described his father's condition when he first took over his care in December, as follows:

'His condition was very, very serious. In fact, I thought it was too late to come back on the case and do much good. But I agreed to devote all my time, that I [66 MICHAPP 255] could, as humanly possible, and he had a severe lung infection with multiple organisms that were very resistant because of the long standing exposure to various drugs that he had in the hospital. He had pulmonary emphysema. He had great difficulty in swallowing. Each time he attempted to eat, there would be repeated attacks of vomiting. And, with each attack of the vomiting, he would have a certain amount of aspiration into the lungs. He had Parkinson's--and he was unable to do an awful lot of things--I think could have been prevented--before--He had a large hydrocele; he had a large inguinal hernia; he had difficulty in speech, but he could, at all times, not only then but even alter, comprehend and communicate with us through gestures--through saying, 'yes' and 'no' and, often times,--earlier in the care that I had--he was making complete statements--those would vary from period to period. But he was in constant need of care right around the clock.'

Dr. James Albert, disputing Dr. Sam's contention that George was mentally alert, testified as follows with respect to the condition of his father in May, 1970:

'Q. Could he get out of bed by himself?

'A. No, he could not.

'Q. Could he walk?

'A. No, he could not.

'Q. Could he engage in a conversation?

'A. He would--He would respond to 'Yes'--with a 'Yes,' or a 'No' answer. But my dad would answer 'Yes' to almost anything if you asked in a--in a positive way, he would answer in a positive--If you asked him in his negative--he would answer in a negative--

'The Court: Are you trying to say that, in his condition then--his physical condition, his mental condition, then--that he was subject to being easily influenced;

'Witness: Yes

'The Court: In responding?

[66 MICHAPP 256] 'Witness: Yes I would say--'

During the summer and early fall of 1970, the children feuded over their father's affection and the conditions which Dr. Sam had established for George's care. Mike and James charged that all of the family, save John and Fred, were barred by Dr. Sam from visiting their father. Mike, locked out of the home in March, 1970, broke the front window to enter. La Mese, upset that her father had deeded the family clothing store to John, returned home where it is claimed George informed her that he had not intended to make the gift to John. On the other hand, Dr. Sam contended that he did deny access to certain family members both because they upset his treatment of George and because George, irritated that they had sought to declare him mentally incompetent in 1969, did not want them to visit.

Following the window breaking incident, Dr. Sam moved George to Sam's own home after which he added $45 a day to his monthly bills for George's care. The bills were submitted to John, who was authorized to pay them under the power of attorney which he then held. In May, 1970, Sam demanded payment in full of the charges he had made to date; but John refused on the grounds of lack of cash. This difference was resolved when Sam accepted payments in part, but by October when Sam again demanded payment in full, John elected to withdraw as attorney in fact. Accordingly, a new power of attorney, naming Fred as attorney in fact, was prepared and signed at Sam's home on October 21, 1970. On November 12, 1970, a new power of attorney granting Fred Albert broader powers was executed at Sam's home. Each document was drafted by former congressman and [66 MICHAPP 257] attorney, Frank Hook, and signature was obtained by either Fred or attorney Hook guiding decedent's hand. None of the children, save Dr. Sam, were present when the documents were signed. However, attorney Hook and Dr. Sam claimed George was fully aware of what was being done and that it was at George's request that the papers were prepared.

Two days after the execution of the second power of attorney Fred and Sam signed a promissory note under which Sam, in consideration of $35,000 paid to him by his father, would repay the obligation ten years after date without interest. ³ Sam admitted that the idea of a loan was initiated by him in conversation with his father, and that he suggested the terms of the loan:

'Q. Well, Doctor, so you decided you would approach your father for a $30,000 loan and take it as a loan rather than receiving payment on your medical fees on which you would have to report income?

'A. That's right.

'Q. And who decided that it would be a ten-year loan?

'A. I decided for a ten-year loan.

'Q. Did you ask your father for $30,000 for ten years at zero percent interest? In other words, did [66 MICHAPP 258] you suggest the terms, or did your father suggest the terms?

'A. I suggested the terms of it. I am making the request. I made the request a number of times and I said, 'We will draw up the note.', and he said 'I don't want any note. I want to give it to you.', and as gift I would have to pay a gift tax.'

Though the note was both signed and dated November 14, it was impossible to advance Sam $35,000 until certain securities were first sold. On November 23, some of the certificates of stock which were in the name of John and his father as joint tenants were endorsed by John. Other certificates of stock which were in the name of La Mese were not endorsed by her, but a blank stock power which had been executed by her some time earlier was used to endorse the certificates. About 1:00 a.m. on the morning of November 24, Fred left Ironwood for his home in Austin, Minnesota taking with him the promissory note and the signed stock certificates. About 11:00 a.m. November 24, Fred, who had arrived in Austin, opened a power of attorney account in the Austin State Bank and wrote a check payable to Sam in the amount of $35,000. He then mailed the check to Sam in Ironwood together with a letter that Sam was not to cash the check until the securities were sold and the funds to cover the check deposited in the Austin bank account. During the afternoon of November 24, George died.

Sometime after George's death, but before December 21, Sam endorsed 'for deposit only in the Northwestern State Bank in Austin, Minnesota' the $35,000 check and either mailed or personally delivered it to Fred. On December 21, Fred received checks for $32,537.39 from the brokerage [66 MICHAPP 259] firm handling the sale of securities. Also, on December 21, Fred deposited the checks so received, plus $1,600 of his own money, making a total balance of $35,041.75 in the power of attorney account. On the same date, the $35,000 check was delivered by Fred to the bank and Applied in payment of a promissory note given by Sam to the bank for $32,983.22, and which note was due December 24, 1970. Brother Fred had endorsed the note and was liable as a joint maker. The check for $35,000 cleared that day leaving a balance in the power of attorney account of $41.75. The loan by the Northwestern State Bank to Sam had been made several years earlier and was for the purpose of...