Myers' Estate, In re

• Decision Date: 09 March 1964
• Docket Number: No. 50358,50358
• Citation: 376 S.W.2d 219
• Parties: In the Matter of the ESTATE of John W. MYERS, Deceased, Appellant, Laclede Gas Company, a Corporation, Petitioner-Respondent.
• Court: Missouri Supreme Court

Page 219

376 S.W.2d 219

In the Matter of the ESTATE of John W. MYERS, Deceased, Appellant Laclede Gas Company, a Corporation, Petitioner-Respondent.

No. 50358.

Supreme Court of Missouri, En Banc.

March 9, 1964.

W. W. Sleater, III, and Suelthaus & Krueger, St. Louis, for appellant.

Whittington & Whittington, Allen H. Whittington, Mildred Whittington, Malloy J. McQueen, Richard L. Eckhart, Charles F. Hamilton, St. Louis, for respondent.

HOLMAN, Judge.

In this case Laclede Gas Company sought to recover an alleged trust fund amounting to $1,423.44 from the estate of John W. Myers, deceased. The proceeding was commenced by the filing of a petition by Laclede in the Probate Court of the City of St. Louis under the provisions of Sec. 473.357 (unless otherwise stated all statutory references are to RSMo 1959, V.A.M.S.). The petition was denied by the probate court. Upon appeal the circuit court found in favor of Laclede. The Estate duly appealed to the St. Louis Court of Appeals and that court reversed the judgment of the circuit court. In re Myers' Estate, 368 S.W.2d 925. Upon application by Laclede, we ordered the case transferred to this court and it 'will be finally determined by the Supreme Court the same as on original appeal.' Civil Rule 84.05(h), V.A.M.R.; Art. V, Sec. 10, Constitution of Missouri, 1945, V.A.M.S.

The facts are not in controversy. An agreed statement of facts was filed in the probate court and refiled in the circuit court upon the trial de novo there. In our statement of the facts we will adopt (without the use of quotation marks) portions of the factual statement appearing in the court of appeals opinion.

John W. Myers died on January 3, 1961, and at the time of his death was the sole owner of Myers Hardware and Paint Company located at 5350 Devonshire Avenue, St. Louis, Missouri. On December 8, 1958, the decedent and the petitioner, Laclede Gas Company, entered into a written agreement. The pertinent parts of said agreement provided for the appointment of the decedent as one of the contracting agents of petitioner for the collection of bills for gas service and appliances on condition, among other things, that he keep a strict and correct account of all collections made on forms prepared and furnished by the petitioner; that he keep separate and distinct from the decedent's own funds and other property all moneys collected under the agreement and all papers and records pertaining to such collections; that he deliver each day to the petitioner at its office all the moneys collected on the previous day. Under the agreement decedent was to 'hold in trust' for the petitioner all the moneys collected until such moneys were paid to the petitioner. Decedent had to keep the stubs removed from bills, so that a record of collections would be available in the event of loss of moneys by holdup, burglary, etc. For the performance of this collection service the decedent was to receive a stated compensation set out in the agreement.

It was further stipulated that on and prior to January 3, 1961, and subsequent to December 8, 1958, decedent had accepted payment of gas bills due to the petitioner and had made periodic remittances to the petitioner for those collections.

It was agreed that at the time of the death of John W. Myers he had collected but not remitted to the petitioner the sum of $1,423.44, said amount of money having been paid to John W. Myers or to his employees by 110 customers of the petitioner. With one exception, all of those bills were collected on or after December 29, 1960, and a large number of them were collected on the date of Mr. Myers' death, i. e., January 3, 1961. The amounts so collected were deposited in a bank account in the Southwest Bank of St. Louis carried in the name of John W. Myers, individually, 'said account being subject to withdrawal upon checks bearing the signature of 'Myers Hardware Company by John W. Myers, or Florence E. Myers.''

On January 3, 1961, Florence Myers, widow of John W. Myers, issued and delivered to petitioner a check for $846.25, and on January 5, 1961, issued and delivered another check for $577.19. Those checks totaled $1,423.44 which is the amount sought to be recovered in this action. Both checks were returned to the petitioner by the Southwest Bank of St. Louis because of the death of John W. Myers. The described bank account was the only bank account owned and carried by the decedent and all of his business accounts and personal bills were paid by checks drawn on that account. On the date of the death of John W. Myers, the balance in the Southwest Bank of St. Louis, to the credit of his estate, was $2,945.29, and the claims filed and allowed against said estate were far in excess of the assets.

The petition filed by Laclede bases its right to recover the fund in question upon Sec. 473.357, which reads as follows:

'If a person files in the probate court a verified petition alleging that the decedent was not and that the petitioner is the owner of personal property described therein, and that it is in the possession of the executor or administrator, and alleges how he acquired ownership thereof and that possession of the property is being wrongfully withheld from him by the executor or administrator, and prays that the court determine the title thereto and order and direct the executor or administrator to deliver the property to the petitioner, a notice and a copy of the petition shall be served on the executor or administrator, who, within ten days thereafter, shall file answer to the petition. If the answer does not admit the allegations of the petition the matter shall be set for hearing by the court and tried upon the issues under the petition and answer, and judgment shall be rendered according to the finding and for costs.'

The main contention of appellant is that petitioner was not entitled to recover because the specific money collected was not in existence since it had been deposited in decedent's bank account, and that said money could not be recovered as a trust fund because such would require equitable action to trace the money collected into the Myers bank account, which relief the probate court has no jurisdiction to render. Appellant therefore concludes that a debtor-creditor relationship existed between Laclede and deceased and hence that Laclede was limited to obtaining allowance of a general claim against the estate.

It will be noted that Sec. 473.357 provides a procedure whereby property wrongfully withheld by an executor or administrator may be recovered in the probate court as distinguished from the procedure specified in Sec. 473.340 (discovery of assets) which permits a recovery of property wrongfully withheld from an executor or administrator. We agree that the procedure authorized by Sec. 473.357 will usually be employed to recover specific personal property which can be identified in kind. However, we have concluded that said section will warrant a recovery by Laclede in this action if the court had jurisdiction to trace the money collected into the bank account of decedent.

Under the terms of the agreement Mr. Myers was to keep the money collected separate from his personal funds, and he agreed to 'hold in trust for the company all moneys collected hereunder until such moneys are paid to the company.' Therefore, when Myers wrongfully deposited the collections in his personal account it did not create a debtor-creditor relationship but, on the contrary, created a specific trust fund to be held for the benefit of Laclede.

The only question remaining for our decision is whether the court was authorized to trace this trust fund into the account of decedent. It is elementary that, since this proceeding originated in the probate court, the circuit court, on appeal, had only such jurisdiction as could have been exercised by the probate court. It is also well settled that '[j]urisdiction over trusts is one of equity's original and inherent powers.' Rawlings v. Rawlings, 332 Mo. 503, 58 S.W.2d 735, 737. The tracing of trust funds is purely equitable in nature, Howard's Estate v. Howe, 344 Mo. 1245, 131 S.W.2d 517. Therefore, the probate court had no jurisdiction to grant the relief sought by Laclede unless that court has equitable jurisdiction in a case of this nature.

The cases decided by the appellate courts of this state concerning the equitable powers of the probate court are in hopeless conflict. See West, Mo. Digest., Courts, k200 1/4. Some of the cases state unequivocally that such courts have no equitable jurisdiction. Others hold that probate courts may exercise equitable powers in certain instances. A third group of cases hold that probate courts have no purely equitable jurisdiction but may invoke equitable principles in determining issues within their jurisdiction. To say the least, these decisions have created a state of uncertainty and confusion regarding the matter of equitable jurisdiction in probate courts. It has been suggested that the appellate courts have been reluctant to hold that probate courts were possessed of equitable jurisdiction because, prior to 1945, the probate judges in most of the counties of this state, were not required to be lawyers. That situation was changed by the adoption of Art. V, Sec. 25, Constitution of Missouri, 1945, V.A.M.S. which provided that thereafter (except for temporary holdovers) probate judges shall be required to have a license to practice law in this state.

In the case before us we are particularly interested in the decisions relating to the jurisdiction of probate courts in matters involving trusts. They are also in conflict. A number of cases hold that probate courts have no jurisdiction in any matter involving a trust. See State ex rel. and to Use of Clay County State Bank v. Waltner, 346 Mo. 1138, 145 S.W.2d 152, State ex rel. North St. Louis Trust Co. v. Wolfe, 343 Mo. 580, 122 S.W.2d 909, Orr v. St. Louis Union Trust Co., 291 Mo. 383, ...