In re Butler's Estate

• Decision Date: 19 June 1940
• Docket Number: 27834.
• Citation: 137 Ohio St. 115,28 N.E.2d 196
• Parties: In re BUTLER'S ESTATE.
• Court: Ohio Supreme Court

28 N.E.2d 196

137 Ohio St. 115

In re BUTLER'S ESTATE.

No. 27834.

Supreme Court of Ohio

June 19, 1940

Certified by Court of Appeals, Franklin County.

Syllabus by the Court.

1. An administrator is the only proper party in the character of a defendant to a proceeding on exceptions to the account of an administrator to surcharge such administrator.

2. A court may, in the exercise of its jurisdiction, compel an attorney appearing before it to pay over or account for moneys or deliver papers which he has received in his official capacity and wrongfully withholds from his client but such attorney must be given an opportunity to answer and defend, and if the attorney in good faith claims title to the funds or papers in question, the client is not entitled to a summary order against him.

The facts in this case arose out of the procedure adopted by the Probate Court of Franklin county in hearing exceptions to the first account of the administrator de bonis non with the will annexed of the estate of Henry V. Butler, deceased, who died February 29, 1936.

Grover C. Brown, a Columbus attorney, upon the death of Butler made claim against his estate for services legal and otherwise, covering a period of 24 years prior to Butler's death, based on a written contract providing payment for such services without fixing any specified amount therefor. Brown filed his claim with the administrator of the estate, Lewis C. Freeman, in the sum of $66,027.

This claim, with others, was included in a schedule of debts filed by the administrator in the Probate Court on July 29, 1936 which schedule was approved by the court on September 1, 1936.

On August 26, 1936, the administrator secured an order from the Probate Court directing him to sell certain securities of the estate at the market value. The next day, the administrator sold, through his brother, Frederick W. Freeman, a broker, certain of such securities to Grover C. Brown for the sum of $39,022.64. On the same day, the administrator paid Brown $10,000 by check to apply on his account. The schedule of debts having been approved, the administrator, on September 25, 1936, delivered a check to Brown for $39,022.64 to apply on his claim against Butler's estate which check was endorsed by Brown to the broker in payment for the securities purchased, and the securities were thereupon delivered to Brown. On September 30, the administrator paid to Brown by an additional check $14,628.90, and later in October another check for $2,000, making a total of $65,651.54.

In April and May 1937, exceptions were filed to the account of the administrator, Lewis C. Freeman, charging fraud and collusion between the administrator, his brother, Frederick W. Freeman, and Grover C. Brown, in allowing and paying Brown's claim. There was also filed a motion by the exceptors to remove Brown as attorney for the administrator, his appointment as such having theretofore been made by the Probate Court. On May 20, 1937, the Probate Court referred the matter of hearing the exceptions to a master. Brown was subpoenaed as a witness and appeared for that purpose first on April 26, 1937, accompanied by counsel who specified that Brown appeared solely to resist the application for his removal as counsel and for no other purpose. No testimony was then taken, but on May 19, 1937, he was called to testify on behalf of the administrator.

When upon cross-examination of Brown it was revealed that the administrator had sold him securities of the estate, the proceeds of which had been applied on his claim against the estate as above stated, the exceptors demanded that Brown produce the securities and that they be impounded until the controversy was finally settled. This matter was referred to the probate judge who ordered Brown to surrender to him the securities on the ground that Brown was a party to the proceeding and, therefore, subject to the jurisdiction of the court. Brown complied with this order under protest and exceptions. Other relevant facts are stated in the case of In re Estate of Butler, 28 N.E.2d 186, this day decided by this court.

The Probate Court found not only that the administrator should be surcharged with all sums paid to Brown except an allowance for services in the sum of $9,000, but that the securities be returned to the present administrator of the estate. Brown took exceptions and appealed to the Court of Appeals.

The Court of Appeals reversed the Probate Court and held that the court erred in holding that Brown was a party to the exceptions to the account of Freeman as administrator; in adjudging the securities held by Brown to be the property of Henry V. Butler, deceased, and not the property of Grover C. Brown; in ordering and adjudging that Brown should deliver the securities to McNamara as administrator de bonis non; in finding that Brown was not the owner of the securities and had not acquired the same for value from Frederick W. Freeman as broker; in finding that the Probate Court had jurisdiction over the person of Grover C. Brown; in adjudging that the securities constituted a trust and were assets of the estate of Henry V. Butler, deceased; and in adjudging that Grover C. Brown had been guilty of fraud and collusion in the acquisition of such securities or in the maladministration of the estate. The Court of Appeals did, however, order that the Probate Court provide that the securities in question be sold at not less than their market value at the option of Brown, and that the proceeds be impounded in place and instead of the securities, and remanded the case to the Probate Court.

The Court of Appeals certified the case to this court as being in conflict with a decision of the Court of Appeals of the Third Appellate District.

O. H. Mosier and Wilson & Rector, all of Columbus, for appellee.

Charles S. Druggan, J. Paul McNamara, Barton Griffith, and Barton Griffith, Jr., all of Columbus, Joseph G. Ehrlich, of Cleveland, and B. G. Watson, of Columbus, for appellants.

HART Judge.

The question made in this case is whether the Probate Court had the jurisdiction and authority to seize in a summary manner the securities in the possession of Grover C. Brown, and impound them pending the settlement of the account of the administrator of Henry V. Butler, under the claim upon the part of the court that these securities belonged to the estate of Butler and should be turned over to the present administrator of that estate.

The diligence of the court in conserving and protecting the assets of the estate in view of the reckless abandon with which the administrator and the attorney for the estate had approved the allowance and payment of large claims made against it by a brother of the administrator and by the attorney himself without notice to other interested parties, is to be commended. However, the question here presented is: Did the action of the court constitute due process of law?

The contention of Brown is that since he was not a party to the proceedings upon the exceptions to the account of the...