In re Clift's Estate
| Decision Date | 20 February 1942 |
| Docket Number | 6341 |
| Citation | 101 Utah 343,122 P.2d 196 |
| Parties | In re CLIFT'S ESTATE. HEATH v. FIRST SECURITY TRUST CO |
| Court | Utah Supreme Court |
Appeal from District Court, Third District, Salt Lake County Herbert M. Schiller, Judge.
Proceeding in the matter of the estate of Virtue Clift, deceased. Lawrence H. Heath, individually and as executor of the estate of Virtue Clift, deceased, filed an account to which First Security Trust Company, as guardian of the estate of Gordon F. Health, incompetent, filed objection. From an adverse judgment the executor appeals.
Affirmed in part and in part reversed and remanded.
Van Cott, Riter & Farnsworth, of Salt Lake City, for appellant.
White Wright & Arnovitz, of Salt Lake City, for respondent.
OPINION
This is an appeal by the executor of the estate of Virtue Clift, deceased, from a decision of the lower court rendered upon a contest of certain items of the executor's 15th account. The contestant is the guardian of the estate of an incompetent heir.
Paragraph II of the lower court's decision sets out briefly the items, part of which are involved in this controversy. That paragraph reads:
"That the executor is hereby charged with accounting to this estate as of the date of this accounting, after the payment of all the expenses, excepting, however, executor's fees, if any, yet to be paid, of the following cash items on hand:
Balance of cash on hand carried forward from Fourteenth
Accounting
$ 203.99
Balance of cash on hand as shown by Fifteenth Accounting
67.67
The amounts hereby disallowed:
(a)
Amount paid to J. H. Garrett
1,040.00
(b)
Amount paid as Clift Building Expense, listed on
Item 1
25.00
(c)
Attorney's fees paid to Shirley P. Jones
100.00
(d)
Back Salary as shown in Item 3
883.00
(e)
Back Salary as shown in Page 2
151.99
(f)
Executor's fees
1,300.00
Total * * *"
The guardian filed written objections to the account. At the hearing all objections were waived but two. Those two covered the expenditures listed as items (a) and (f) in the paragraph quoted above. Upon this appeal appellant limits this phase of his assigned errors to the expenditure of $ 1,040, item (a).
The other items, (b), (c), (d), and (e), were matters taken up by the court even though not within the issues raised by the guardian's written objections. Appellant contends that, under our procedure, it was error for the court to consider matters not within the issues.
As to item (e) appellant contends that if the court had authority to consider matters not in issue, it was error to charge him with this item, as to do so constituted a modification of previous approved accounts; and an account once settled and approved becomes final except in an equitable proceeding based on fraud.
We shall discuss these issues on appeal in the order named.
The guardian's objection to item (a) reads as follows:
"That it does not appear from the files and records in this case that the executor was authorized to pay the sum of $ 1,040.00 to J. H. Garret for services in attempting to secure a lien upon the Clift Building."
Upon the issue raised by this objection the lower court found as follows:
"That expenditures totaling the sum of $ 1,040.00 paid to J. H. Garrett (represented by voucher numbers 3186, 3188, 3192, 3198, 3199 and 3202) were made between November 6, 1934, and April 2, 1935; that a foreclosure action had been instituted by the trustee for the bondholders on the Clift Building on the 15th day of November, 1933, and a receiver had been appointed on the said day to act for and on behalf of the trustee for the bondholders; that a decree of foreclosure against the said property was entered on or before the 25th day of June, 1934, and that the period of redemption expired on or before the 23rd day of December, 1934; that during all this time Lawrence H. Heath had been acting as building manager in the employ of the receiver and was fully informed as to all proceedings in the foreclosure of the property and the fact that estate was being divested of the title to this property; that during the said time the said executor made no report in either the foreclosure action or in the probate proceedings as to any efforts that he was making to protect the equity of the estate in and to the said property, nor did he make any report to the probate court of the foreclosure proceedings or ask any instructions of the probate court as to how to proceed in defending the foreclosure proceedings or what efforts to make in saving the equity of the estate; that no report was made to the court that J. H. Garrett was employed in assisting to sell the property or to have it refinanced; that during all of the said time J. H. Garrett was employed in the insurance brokerage business and was neither a licensed real estate broker nor engaged in financial matters."
With the exception of the last clause of that paragraph, the lower court apparently held against the executor the fact that he had not previously reported the matter to the court, and had not sought the court's advice as to the best thing to be done under the circumstances.
The principal asset of this estate was the Clift Building mentioned in the quoted finding of fact. The executor testified that Mr. Garrett was employed to obtain funds with which to redeem the property. The estate's equity in the building was in the neighborhood of $ 250,000 at the time the executor took the property over in 1925. The testimony does not disclose the condition of affairs while the redemption period was running. We cite these additional facts in order to give a better picture of the executor's theory of the necessity of employing help to try to save the building for the estate.
The fact that prior authority for that employment was not obtained from the court, or the fact that the court's advice in the matter was not obtained, should not be grounds for rejecting the expense of the employment, if the agent was employed in good faith; if his services were reasonably necessary to the best interests of the estate; and if the agent so employed was better qualified than the executor to obtain such monies. "Better qualified" may lie in the nature of the agent's business or in the breadth of his financial contacts. It is rather hard to lay down any fixed rule for this determination. It is a matter of what is reasonable under the circumstances, and in principle is similar to the recognized advantages incident to the employment of a real estate agent to sell real property belonging to the estate. 21 Am. Jur. 671, Sec. 517; 3 Bancroft Probate Practice 1646, Sec. 970; 91 A. L. R. 829 et seq.; In re Willard's Estate, 139 Cal. 501, 73 P. 240, 64 L.R.A. 554.
The burden rests upon the executor to prove that the circumstances justify the expenditures. 3 Bancroft Probate Practice 1676, 1634; In re O'Reilly's Estate, 27 Ariz. 222, 231 P. 916; In re Jennings' Estate, 74 Mont. 449, 241 P. 648; In re Hansen's Estate, 55 Utah 23, 184 P. 197.
This brings us to the last clause of finding No. II quoted above:
"that during all of the said time J. H. Garrett was employed in the insurance brokerage business and was neither a licensed real estate broker nor engaged in financial matters."
It is evident that the court did not believe that there was evidence to support the selection of J. H. Garrett as one specially qualified to accomplish the objective for which he was employed. The record of testimony is very vague on this subject. As a matter of fact the testimony indicates that the real contact man in the effort to obtain money for redeeming the property was an attorney Shirley Jones, who was paid through Mr. Garrett. Under the circumstances we cannot say that the lower court abused its discretion in rejecting this item of expense and charging it to the executor. 3 Bancroft Probate Practice 1634; In re Parker's Estate, 186 Cal. 668, 200 P. 619, and Id., 186 Cal. 671, 200 P. 620. In re Mertz Estate, 246 Ill.App. 283; In re Cheney's Estate, 103 Colo. 319, 85 P.2d 729; In re Fetterman's Estate, 183 Wash. 410, 48 P.2d 638.
We have in our Code two procedural statutes which read as follows:
Sec. 102-14-17, R. S. U. 1933.
Sec. 102-14-18, R. S. U. 1933.
The present case was transferred to the trial calendar after the objections were filed. It should have been tried as if it were a civil matter upon the issues drawn by the pleadings and the testimony submitted appropriate to those issues. In re McLaren's Estate , 99 Utah 340, 106 P.2d 766. If there is included at such a hearing matters of probate not in controversy but due for court approval or determination, the result is going to be confusing so far...
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