Howard's Estate v. Howe

• Citation: 131 S.W.2d 517,344 Mo. 1245
• Decision Date: 05 September 1939
• Docket Number: 36485
• Parties: In the Matter of the Estate of Minnie Morey Howard v. A. Frank Howe, Claimant, Appellant
• Court: United States State Supreme Court of Missouri

131 S.W.2d 517

344 Mo. 1245

In the Matter of the Estate of Minnie Morey Howard v. A. Frank Howe, Claimant, Appellant

No. 36485

Supreme Court of Missouri

September 5, 1939

Appeal from Circuit Court of St. Louis County; Hon. John J Wolfe, Judge;

Affirmed.

Joseph T. Davis, Bruce A. Campbell and L. C. Kingsland for A. Frank Howe; Robert T. Hensley of counsel.

(1) By statute, two methods of presenting a claim for allowance and classification against an estate are provided. A claim and demand may be allowed and proved before the probate court and appellant has adopted this method. The probate court therefore, has jurisdiction of appellant's claim and demand. Secs. 182, 184, 185, 186, 187, 189, 190, 193, 195, 202, R. S. 1929. (2) By reason of her contract with the committee for all the stockholders of the Commonwealth Steel Company, Minnie Morey Howard became and her estate now is primarily responsible for the debts, obligations and liabilities of the committee for the stockholders of the Commonwealth Steel Company. Bethlehem Iron Co. v. Hoadley, 152 F. 735; Hendrick v. Lindsay, 23 L.Ed. 855; Fish v. First Natl. Bank of Seattle, 150 F. 524; Crone v. Stinde, 156 Mo. 262; Bank v. Comm. Co., 139 Mo.App. 110; Searles v. City of Flora, 80 N.E. 98; Hartman v. Pistorious, 94 N.E. 131. (3) The liability of the committee for the stockholders of the Commonwealth Steel Company to the appellant, A. Frank Howe, is finally established and determined by the decree of the United States District Court in and for the Southern District of the State of Illinois. The question of the committee's liability to appellant is res adjudicata. (4) The pendency of the accounting in the United States District Court in and for the Southern District of the State of Illinois is no bar to the proof, allowance and classification of the instant claim and demand in the Probate Court of St. Louis County because there is no identity of parties and the courts are not in the same jurisdiction. Sec. 770, R. S. 1939; 1 C. J. S. 90; Tire Co. v. Webb, 143 Mo.App. 679; Robinson v. Floesch Const. Co., 242 S.W. 421; 1 C. J. S. 101; Kline v. Burke Const. Co., 67 L.Ed. 226; Franceshi v. De Tord, 71 F.2d 95; Newberry v. Davison Chemical Co., 65 F.2d 724; Johnson v. Amer. Surety Co., 238 S.W. 500. On error in sustaining the executor's motion to dismiss and strike from the file the motion of A. Frank Howe to set aside orders of partial distribution and to remove executor. (a) The executor of an estate is a quasi official of the court in a position of trust; and the primary obligation of each estate is to pay the debts of the decedent. Since this primary obligation has been entirely disregarded the orders of partial distribution heretofore made must be set aside and the assets refunded to the estate if justice be done. 23 C. J. 1170, sec. 387; Rawlings v. Rawlings, 58 S.W.2d 735; State ex rel. v. Holtcamp, 181 S.W. 1007; Perkins v. Goddin, 111 Mo.App. 429; Hemley v. Harmon, 103 Mo.App. 233; Steele v. Steele, 64 Ala. 438; Madison v. Buhl, 8 P.2d 271; Fleming v. Kirkland, 146 So. 384; Succession of Steidtman, 135 So. 673; Finnegan v. La Fontaine, 191 A. 337; Salter v. Drowne, 98 N.E. 399; Sec. 247, R. S. 1929. (b) Because the executor in this estate has totally disregarded his trust and exhibited an unfitness to properly fulfill the terms of his office, and his personal interests conflict with his duties, he should be removed as executor. Sec. 43, R. S. 1929; Davis v. Roberts, 226 S.W. 662; In re Carter's Estate, 38 N.Y.S. 1083; Putney v. Fletcher, 19 N.E. 370; In re Lawrence's Estate, 295 N.Y.S. 930; Farnsworth v. Hatch, 151 P. 537; In re McCluskey, 100 A. 977; In re Stalls, 143 N.Y.S. 775; Comstock v. Bowles, 3 N.E.2d 817.

Ethan A. H. Shepley and Frank Coffman for respondent.

(1) Appellant's alleged claim is contingent. Whatever demand, if any, appellant may have in the future against any stockholder of the Commonwealth Steel Company, upon any theory of liability, will depend upon the final judgment of the Federal Court in favor of appellant against the Commonwealth Steel Company. It depends upon the further contingency that such final judgment, if any, will be greater than $ 1,700,000, the amount held for appellant by the stockholders' committee and upon which he has a lien. His demand, therefore, being entirely contingent, is not one which can be classified and allowed against respondent estate. Elms Realty Co. v. Wood, 225 S.W. 1005, 285 Mo. 136; Wilbur v. Wilbur, 201 S.W. 389; State ex rel. Patterson v. Tittmann, 134 Mo. 169; State ex rel. Patterson v. Tittmann, 54 Mo.App. 499; Tenny v. Lasley, 80 Mo. 669; Binz v. Hyatt, 200 Mo. 309, 98 S.W. 637; Springfield v. Clement, 225 S.W. 124, 205 Mo.App. 125; Grigg v. Lively, 257 S.W. 188, 214 Mo.App. 481; Morgan v. Gibson, 42 Mo.App. 244; Chamber's Adm. v. Smith, Adm., 23 Mo. 174; 24 C. J., secs. 900, 947, pp. 293, 325. (2) The stockholders' committee, a party to the contract, could not at this time maintain a suit on the contract in question by reason of appellant's alleged debt, because it is not yet known what his debt is or whether it will be anything beyond the money being held for him. Therefore, no third party beneficiary under such contract (even if appellant were such) can acquire a better standing to enforce the contract at this time than that of a contracting party. Davis v. Dunn, 121 Mo.App. 493; Ellis v. Harrison, 104 Mo. 278. (3) Before one, not a party to a contract, can maintain a suit thereon, upon the theory that it was for his benefit, it must have been within contemplation of the parties at the time of making the contract that he was intended as a beneficiary. Beattie Mfg. Co. v. Clark, 208 Mo. 109; Ellis v. Harrison, 104 Mo. 278; State ex rel. v. Loomis, 88 Mo.App. 507. (4) An accounting growing out of a trust relationship is necessary to determine this alleged indebtedness. Also to be determined is "the earnings or values, if any, of the patents resulting to said corporation for the manner in which they were used." Also to be determined is the value of the shop right in such patents in said corporation. Such matters are strictly creatures of equity jurisdiction and not cognizable in a court of probate. Mo. Lead M. & S. Co. v. Reinhard, 114 Mo. 232, 21 S.W. 488; Dahlberg v. Fisse, 40 S.W.2d 609, 328 Mo. 221; Johnston v. Grice, 272 Mo. 429, 199 S.W. 409; Orr v. St. Louis Union Trust Co., 236 S.W. 649, 291 Mo. 404; Strong v. Crancer, 76 S.W.2d 386, 335 Mo. 1217; Jenkins v. Morrow, 131 Mo.App. 298, 110 S.W. 686; State ex rel. v. Shackelford, 172 S.W. 350; Stevens v. Stevens, 172 Mo. 37.

Douglas, J. All concur, except Hays, J., absent.

OPINION

DOUGLAS

Upon appeal from the probate court, the Circuit Court of St. Louis County dismissed the demand of $ 4,000,000 of A. Frank Howe against the estate of Minnie Morey Howard, deceased, and claimant has appealed to this court. An incidental phase of this controversy was before us in State ex rel. Howe v. Hughes, 343 Mo. 827, 123 S.W.2d 105.

The primary question for decision is whether the demand is contingent or of an equitable nature so that the probate court has no jurisdiction of it.

The demand is expressly based upon an interlocutory decree of the United States District Court for the Southern District of Illinois in an equity suit brought by A. F. Howe, plaintiff, the appellant here, against Clarence H. Howard, the Commonwealth Steel Company et al., defendants. The case is still pending, no final decree having been entered. Clarence H. Howard was the husband of Minnie Morey Howard. She died in February, 1937, and he predeceased her. All of the facts herein set out are stated as essential grounds in support of the demand.

Howe was and had been for some time an employee of the company. He brought the above suit claiming to be the inventor and owner of a patent for forming moulds for steel castings which the company used exclusively during the life of the patent and also of a patent for improvements in sand mills, also used by the company. He claimed that he was induced to assign these patents to the company and that such assignment was void. He prayed inter alia that Howard and the company, or either of them, be declared to be trustees as to all profits from the use of said patents, for an accounting, and for a decree for his fair share of the profits.

While this suit was pending, a committee for all the stockholders of the company sold all the property and assets of the company and distributed the major portion of the proceeds pro rata to the stockholders, retaining some funds for debts and expenses. An agreement between the committee and the stockholders was made providing that the acceptance of any distribution from the committee made the receiver thereof responsible for the debts, liabilities and obligations of the committee to the extent of the distribution received. The members of this committee were made parties defendant in the suit.

The District Court handed down its decree finding that Howe was entitled to a decree in harmony with the prayer of his bill impressed a trust upon the patent, the legal title of which was in the company, and for the value of the patents less the value of shop rights. It ordered that an account be taken between Howe and the company to determine the "reasonable and the true value, if any," of the patents, the "value, if any," of shop rights thereunder in the company and that "plaintiff have a lien against all such assets and property in the possession and control of said (stockholders') committee to secure the payment of the amount or amounts awarded plaintiff, if any, under the accounting." The court enjoined the distribution of any funds remaining in the hands of the committee "until the interest, if any, of the...