In re Sterner's Estate

• Decision Date: 18 January 1938
• Docket Number: 44074.
• Citation: 277 N.W. 366,224 Iowa 605
• Parties: In re STERNER'S ESTATE. v. STERNER et al. YESSLER
• Court: Iowa Supreme Court

277 N.W. 366

224 Iowa 605

In re STERNER'S ESTATE.

YESSLER v. STERNER et al.

No. 44074.

Supreme Court of Iowa.

January 18, 1938

Appeal from District Court, Linn County; H. C. Ring, Judge.

This is an appeal from three separate and distinct orders in probate entered by the court in the settlement of the estate of Milton R. Sterner, deceased. The facts and the rulings of the court are set out in the opinion.

Reversed in part; affirmed in part and remanded.

RICHARDS, J., dissenting in part.

C. J Lynch, of Cedar Rapids, for appellant J. U. Yessler administrator with will annexed of estate of Milton R. Sterner, deceased.

Don Barnes, Barnes, Chamberlain & Hanzlik, and E. H. Wadsworth, all of Cedar Rapids, for appellees Paul W. Sterner and Paul W. Sterner, former administrator with will annexed of estate of Milton R. Sterner, deceased, and Fidelity & Deposit Company of Maryland.

E. A. Johnson, of Cedar Rapids, for appellee Carolyn M. Sterner.

Otto L. Schluter, of Cedar Rapids, for Dale O. Stentz, trustee in bankruptcy of Paul W. Sterner, bankrupt.

L. D. Dennis, of Cedar Rapids, for D. W. Bates, superintendent of banking of the state of Iowa, receiver of the Springville Savings Bank of Springville, Iowa, claimant, against estate of Milton R. Sterner, deceased.

Donnelly, Lynch, Anderson & Lynch, of Cedar Rapids, formerly attorneys for John T. Yocom, executor of estate of Edward Yocom, deceased, and now attorneys for D. E. Smith, trustee, assignee of the claim allowed in favor of John T. Yocom, executor, and against the M. R. Sterner's Estate.

Otto L. Schluter, of Cedar Rapids, for Ona Foughty, claimant.

HAMILTON Chief Justice.

This appeal presents three separate and distinct propositions growing out of the administration and settlement of the estate of Milton R. Sterner, deceased. Milton R. Sterner died testate in Linn county, Iowa, on March 28, 1930. His will was duly admitted to probate on April 16, 1930. He gave his wife the homestead property and a life estate in the other property, and subject to this gave all his remainder estate to his two children, Carolyn M. and Paul W. Sterner. Paul W. Sterner was appointed administrator with the will annexed on April 21, 1930, and on said date qualified by taking the oath required by law and filing bond in the sum of $10,000 with Fidelity & Deposit Company of Maryland as surety. The estate consisted of some farms and town property, also personal property, including a one-third interest in a store at Springville, Iowa, where Mr. Sterner lived at the time of his death. The first report of the administrator was not filed until June 6, 1933. His second report was filed on October 17, 1934. In these reports it is alleged, among other things, that Paul W. Sterner and his sister have advanced from their own funds for the purpose of paying bills and notes of the estate the sum of $8,307.23, for which amount the administrator asked credit. On an ex parte hearing an interlocutory order was made by the court allowing the same as a proper charge against said estate.

On November 3, 1934, D. W. Bates, superintendent of banking of the state of Iowa, and receiver of the Springville Savings Bank of Springville, Iowa, as one of the claimants against said estate, filed objections to the reports of Paul W. Sterner, administrator, and asked to have him removed as administrator, grounds 81 and 82 of said objections being as follows:

" 81. That the reports show that the said Administrator with the Will Annexed has allowed the claim of himself as an individual and Carrie M. Sterner, his sister, in the sum of $8,307.23 without having any special administrator appointed to pass upon his claim, that the purpose of having his claim so allowed was to secure the assets of the said estate to himself and his sister and thus defeat the rights of other creditors.

82. That as shown by his second report the said Administrator with the Will Annexed has paid to himself and his sister, Carrie M. Sterner, the sum of $1,542.18 to apply on their alleged claim of $8,307.23. That such payments are a preference to the Administrator and his said sister, Carrie M. Sterner. It appears from the entire records of the said estate that the court costs and attorney fees and taxes upon the estate property are at the present time unpaid and that there are other claims of the same class which have not yet been paid."

There was a hearing before the court on the objections, and on December 3, 1935, the court entered his ruling and order, and, among other things, removed Paul W. Sterner as administrator and in his place appointed J. U. Yessler administrator, and found and adjudged that Paul W. Sterner had appropriated and converted to his own use property belonging to the estate of the value of $9,915.09, and ordered that this sum, together with interest, be paid to the newly appointed administrator on or before the 20th day of December, 1935. He also refused to approve the said reports. All other issues and matters involved were continued for further consideration, the court retaining jurisdiction of the subject-matter and the parties, reserving the right to make and render such further findings, orders, and judgments in said cause as might be required to protect the interests of the estate.

Sterner failed to comply with this order of the court. Yessler, administrator, then filed application under sections 11984 and 11985, Code 1935, wherein he asked judgment on the bond against Paul W. Sterner and his bondsmen for the full amount of the bond, to wit, $10,000. The amount of defalcation with interest amounted to more than this sum, but the amount of the judgment was limited for the reason that the bond was only in the principal sum of $10,000. This was set down for hearing and notice prescribed and served upon Sterner and the bond company. They appeared and filed objections to said application. There was a hearing to the court, and on March 4, 1936, the court found that said Paul W. Sterner had failed to comply with the court's ruling and order, made on the 3d day of December, 1935, and failed to pay to J. U. Yessler, the newly appointed administrator with the will annexed of the estate of Milton R. Sterner, deceased, the said sum of $9,915.09, and interest thereon from July 1, 1931, or any portion thereof, the total amount of said principal and interest at this time amounting to $12,627.96. The court rendered judgment in favor of said Yessler, administrator, and against Sterner and the Fidelity & Deposit Company of Maryland, surety on Sterner's bond as administrator in the total amount of $10,000, together with interest thereon from the 20th day of December, 1935, without prejudice to the estate to collect from Sterner the balance of said sum over and above the amount of the judgment rendered on the bond.

In the meantime objections to the allowance of the claim of D. W. Bates, etc., were filed by the Fidelity & Deposit Company of Maryland, Paul W. Sterner, Carolyn M. Sterner, and J. U. Yessler, administrator of the estate of Milton R. Sterner, deceased, in which they set up the fact that the claim was not filed within the statutory period. There was a hearing on July 22, 1936. At the close of the hearing the bond company and Paul W. Sterner moved the court to sustain each and all of the objections to the testimony offered in support of said claim, and further moved the court not to permit the filing of said claim other than the claim of $1,700 assessment on bank stock. On September 17, 1936, this motion was sustained generally, thus denying that portion of the bank's claim based on a guaranty bond and back rent on one of the farms to which the bank held title, and which had been used by the deceased for a number of years, and upon which the bank claimed rent had not been paid. Bates, receiver, has appealed from this order, denying his claim, which appeal is cause No. 44073 now pending in this court.

On September 22, 1936, Paul W. Sterner and the bond company defendants in the $10,000 judgment on Sterner's bond as administrator, filed a petition for new trial, based on the ground of newly discovered evidence, and to set aside the order and judgment of the court entered on March 4, 1936. To this petition Yessler, administrator, and Bates, receiver, filed answer. Trial was had to the court and on February 15, 1937, one of the days of the regular January, 1937, term of the Linn county district court, the court entered an order setting aside the order and judgment entered on March 4, 1936, and setting aside the order of December 3, 1935, and all orders and judgments and rulings in any manner adverse to the said parties upon the trial of said cause, and prior to said trial and subsequent thereto, and the judgment for costs against said parties was set aside and canceled. Later, on March 27, 1937, the same being one of the regular days of the March, 1937, term of the Linn county district court, the court on his own motion entered an order which is denominated " Substituted Order in lieu of ‘ Enrolled Order Setting Aside Verdict and Judgment and Granting New Trial,’ entered by the court on the 15th day of February, 1937." By this substituted order, the court expunged from the record the former order dated February 15, 1937, and in lieu thereof entered an order sustaining " that portion of the petition for new trial, which asks that the judgment entered by the Court on the 4th day of March, 1936, in said cause, against Paul W. Sterner, Administrator with Will Annexed of the Estate of Milton R. Sterner, deceased, and Fidelity and Deposit Company of Maryland, surety on the bond of said administrator, be cancelled, set aside and held for naught. Said petition for new trial is otherwise overruled," etc. From this order setting...