Heinz v. Davenport Bank & Trust Co.
| Decision Date | 17 June 1941 |
| Docket Number | 45328. |
| Citation | 298 N.W. 785,230 Iowa 546 |
| Parties | HEINZ v. DAVENPORT BANK & TRUST CO. |
| Court | Iowa Supreme Court |
Appeal from District Court, Scott County; John E. Purcell, Judge.
Claim by successor-trustee against the estate of one of the sureties on predecessor-trustee's bond. Demurrer by claimant to defendant's answer overruled, and claimant appeals.
Affirmed.
Waldo M. Wissler, of Davenport, and D. C. Nolan, of Iowa City, for appellant.
Roddewig & Hutchinson, Albert W. Hamann, and Lane & Waterman all of Davenport, for appellee.
On February 27, 1939, appellant filed a claim against the estate of Peter N. Jacobsen, deceased, a surety on the bond of the former trustee of the estate of Minnie Heinz, who died testate January 4, 1926. The Minnie Heinz will was admitted to probate and the American Trust Company of Davenport appointed executor and trustee. The will gave general authority to the trustee to have as complete power to manage and control the property as the testatrix would have if living, and to execute all necessary instruments, provided for the distribution of the income and the principal, and the trust was to continue for ten years. The trustee gave a bond on which Peter N. Jacobsen, appellee's decedent, was a surety. On December 28, 1932, a receiver was appointed for the American Trust Company of Davenport. An order prescribing the time for filing claims against the receiver was entered in the receivership proceedings, and notice, prescribed by the court, was given by publication. Later time for filing claims was extended. Alice M. Heinz was appointed and qualified as successor-trustee on April 5 1933. On May 23, 1933, she filed an application in the receivership proceedings, requesting delivery of certain personal assets; requesting execution by the receiver of conveyances of real estate belonging to the trust, and demanding payment of $29.85 collected by the receiver; alleging that the American Trust Company had not accounted for money in the sum of $621.27, admitting that the trust company was entitled to a fee of $50, and asking for general equitable relief. Such application was heard by the district court and an order entered for the delivery of the property, the execution of the conveyances, the payment of $29.85, and the allowance of the claim in the sum of $521.27. The difference between the amount allowed and the amount claimed was $100, which was allowed as a trustee's fee to the trust company. No exception was taken nor was there any appeal from the order. Later, in 1935, the superintendent of banking, acting as receiver of the American Trust Company, filed his report on the classification, collection, rejection, and allowance of claims, preferences, and set-offs, which included the claim of Alice M. Heinz as successor-trustee of $712, less the fee claimed by the trust company of $100. Objections were filed by the appellant as successor-trustee, and on hearing the objections of appellant were overruled. To this order of the court there was no exception and no appeal was taken. The amount, less the trustee's fee, was later paid to appellant in instalments, the last of which was on April 14, 1939, for which appellant receipted, acknowledging receipt of the final dividend in full payment thereof. On July 6, 1939, the receiver of the American Trust Company filed his twenty-fifth and final report as to all fiduciary claims, stating that he had paid all trust claims in full and had liquidated, sold, and transferred all assets of the trust except about $1,713.44 to the holders of certain debentures, and that all other claims were allowed and paid or finally disallowed, and that the time for filing claims had long since expired. The receiver's report was approved by the district court July 18, 1939, the court specifically finding as stated by the receiver in his report. The remaining assets of the receivership were finally sold and distributed to the debenture-holders.
On February 27, 1939, the petition, or claim in this action, was filed by the appellant against the estate of Peter N. Jacobsen, setting out the facts as to the will of Minnie Heinz, the appointment of the American Trust Company as executor and trustee, the appointment of receiver; alleging that the trust company had failed to realize on certain shares of bank and trust company stock until it had become worthless, and that thereby the Minnie Heinz estate was compelled to pay stock assessments; the illegal investment by the former trustee, the American Trust Company, in certain mortgages which were not proper securities; and claiming damages in the sum of $65,538.72, with interest. By amendment to this claim or petition, filed October 20, 1939, the appellant alleges that by increase in the capital stock of the original trustee, and by mergers, the retention of the investment of funds in the estate in said shares of stock, and lack of diligence in disposing of same, the estate was damaged. The amendment to the claim recites and sets out at length various loans secured by mortgages, which it is claimed were illegal, and alleges that such company, by its negligence and lack of diligence, failed to collect the amount due on certain mortgages, and asks damages as aforesaid. On November 14, 1939, appellee filed an answer in five counts, the fifth of which was a general denial.
Count 1 of such answer sets out the facts as to the order and hearing as heretofore stated; that none of the purported claims asserted against the appellee arose after May 23, 1933; alleges a merger of all claims which claimant could have asserted against the executor in the claim actually filed and allowed; that such claimant could not split her total claim, and that any part not covered by the claim as filed could not thereafter be asserted against the American Trust Company or against any surety on its bond, and that the filing and allowing of appellant's claim constituted a final accounting and a waiver of any and all other claims appellant had or might claim against the predecessor-trustee, and that it was res adjudicata.
Count 2 of the answer sets up the defense of estoppel; alleges that appellant made no further claim against the American Trust Company until after the time for filing claims against the receiver had expired; that all claimants possessing and filing fiduciary claims have been paid in full, as shown by the order on the receiver's twenty-fifth report, to which order no exceptions or appeal were taken; alleges that the remaining assets of such receivership were disposed of and distributed under order of court and at the time of filing the present claim no assets remained in the receivership; that the sureties possessed no right of indemnity on the bond of the American Trust Company; that the appellant by her action in filing her claim and securing its allowance and having had an accounting with the principal on the bond and making settlement with the receiver, led the sureties on the bond to believe that she asserted no other claim against either the principal or sureties, who were gratuitous sureties, and that, relying on such accounting and adjudication and believing that the claimant had no claims against the American Trust Company, they did not take and are not now capable of taking any further steps to protect their rights, and would now have no recourse against the assets of the receivership of the American Trust Company, which assets would have been sufficient to pay the claim in full, and that therefore such sureties are discharged and released and the successor-trustee (appellant herein) is estopped to assert any claim against such sureties.
Count 3 of the answer sets up that, except as alleged in count 1, there has been no settlement of the trustee's accounts, and that if the matters and things alleged in count 1 do not constitute such settlement of said accounts, no action is maintainable against the sureties on the bond until a breach is established through a settlement of such accounts.
Count 4 alleges that the investments and reinvestments by the trustee were authorized by the will and constitute no cause of action on the bond against either the principal or sureties.
To this answer of the appellee appellant filed demurrer in four divisions to the various counts, alleging as to each that it did not constitute a defense and was immaterial and irrelevant.
The first division of the demurrer assails count 1 of the answer for the reasons: That the application of the claimant shows that it was only an application for an order directing the receiver to convey title to real estate and deliver possession of personal property and was not a claim for an accounting or for damages; that the order of May 23, 1933, was no defense, that it only directed the receiver to turn over property, and that there were no issues other than the custody and possession of personal property and evidence of title to real estate; that the direction by the court to turn over and deliver assets did not waive or discharge the affirmative statutory duty of the former trustee and did not adjudicate any obligation or duty to account for all assets; that the allegations as to the report of the receiver and objections are immaterial and irrelevant for the reason that the report did not constitute a full and complete accounting but reported only the net cash balance in the hands of the former trustee, and did not discharge the duty of the trustee to account; and that the receiver of the American Trust Company did not and could not account for the trust property but could only conserve and distribute the tangible assets of the trust company and had no power or authority to discharge the affirmative duty of accounting for the trust property; that the...
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