Pohlmeyer v. Second Nat. Bank of Richmond

• Decision Date: 26 October 1948
• Docket Number: 17588.
• Citation: 81 N.E.2d 709,118 Ind.App. 651
• Parties: POHLMEYER v. SECOND NAT. BANK OF RICHMOND.
• Court: Indiana Appellate Court

81 N.E.2d 709

118 Ind.App. 651

POHLMEYER v. SECOND NAT. BANK OF RICHMOND.

No. 17588.

Appellate Court of Indiana, in Banc.

October 26, 1948

Appeal from Wayne Circuit Court; Earl Keisker, Special Judge.

Proceeding in the matter of the estate of Henry J. Pohlmeyer, deceased wherein Marcellus R. Pohlmeyer filed exception to the final report of Second National Bank of Richmond, Indiana, executor of the last will of Henry J. Pohlmeyer, deceased. From a judgment disallowing the exceptions, Marcellus R. Pohlmeyer appeals.

Affirmed.

Daily, Daily & Daily, A. Joseph Maloof, and Clinton H. Gwan, all of Indianapolis, and David E. Hasemeier of Richmond, for appellant.

Robert Hollowell, Jr., of Indianapolis, and Gardner, Jessup Harrington & Haworth, of Richmond, for appellee.

CRUMPACKER Judge.

This litigation has its origin in the alleged mal-administration of the estate of Henry J. Pohlmeyer, deceased, by the Second National Bank of Richmond, Indiana, executor of said decedent's last will and testament. The issues were upon current and final reports by the executor and exceptions thereto by appellant. The court found the facts specially, stated conclusions of law favorable to the executor and entered judgment overruling each exception taken by the appellant, allowing executor's and attorney's fees, and in all things approving said current and final reports. The appellant's motion for a new trial was overruled and this appeal followed in due course.

The facts, as found by the court, may be summarized as follows: Henry J. Pohlmeyer, a resident of the city of Richmond, Indiana, died testate on the 19th day of August, 1930, leaving Johanna Elizabeth Pohlmeyer, a second childless wife, and the appellant Marcellus R. Pohlmeyer, a son by a former marriage, as his sole and only heirs at law. Prior to their marriage the decedent and the said Johanna Elizabeth Pohlmeyer, nee O'Connor, entered into a written agreement whereby the latter agreed to 'accept from the estate of Henry J. Pohlmeyer, after his death and within six months thereafter, * * *, the sum of Twenty-five Thousand Dollars ($25,000) in place and instead of all rights which, as widow, Johanna Elizabeth O'Connor might otherwise have, as widow's interest in the real estate or as a distributive share of any of the personal property of Henry J. Pohlmeyer under any statutes now or hereafter in force and effect.'

The decedent's will was probated in the Wayne Circuit Court on August 15, 1930, and provided first for the payment of just debts; second, for the performance of the obligations of the ante-nuptial agreement above mentioned; and third, the distribution of the residue of the estate to the testator's son Marcellus R. Pohlmeyer, the appellant herein. The appellee, Second National Bank of Richmond, was nominated as executor of the will and, under appointment of the Wayne Circuit Court, qualified as such on August 25, 1930, and forthwith entered upon the discharge of its duties. On October 17, 1930, the appellee filed an inventory and appraisement of the estate's assets in the sum of $189,435.82. The only real estate disclosed by this inventory, as belonging to the testator at the time of his death, was an equity in a town lot appraised at $500 which was subsequently conveyed to the Pohlmeyer Property Corporation without consideration but with the knowledge and consent of the appellant. Later it was discovered that the testator died seized of an interest in land, the identity of which is unimportant, of the approximate value of $1600. The principal asset of the estate was a block of 4,998 shares of capital stock of Pohlmeyer Property Corporation which was appraised in the sum of $128,229.36. This corporation is a real estate holding company whose principal assets, at that time, were business and resident properties in the city of Richmond and the testator's interest therein represented its entire issue of capital stock except for one share held by the appellant and one share held by Wilford Jessup for organization purposes. At the time of the testator's death the real estate holdings of the Pohlmeyer Property Corporation were encumbered by two mortgages, one to the Second National Bank of Richmond in the sum of $42,000 and the other to the Dickinson Trust Company of Richmond in the sum of $34,000. In addition to such secured indebtedness the corporation owed $2,741.50 evidenced by its promissory note held by the Fletcher American National Bank of Indianapolis.

The remaining assets of the estate, as inventoried and appraised by the appellee, consisted of cash, life insurance, an interest in the partnership of Pohlmeyer, Welfer and Smith, Undertakers, stocks in local banks and real estate corporations, accounts receivable, an automobile and miscellaneous personal and household effects.

Upon the filing of this inventory it appeared to the widow, Johanna Pohlmeyer, that her statutory interest in the estate was greatly in excess of what she would receive under the terms of the ante-nuptial contract and she employed an attorney to assert the same. After numerous conferences between said widow and her attorney, the appellee and the appellant, said Johanna Pohlmeyer agreed to accept cash in the sum of $25,329.50, the automobile and all household effects in full settlement of any and all claims she might have as such widow. This settlement was reached with the knowledge and consent of the appellant and the approval of the court and was fully performed by the appellee in due course of administration, without objection by the appellant until the executor's final report was filed.

At this time the entire country was in the midst of a general economic depression. The market value of real estate had begun to decline rapidly and numerous common and preferred stocks, bonds and certificates issued and sold on security of real estate were in default. Many banks throughout the country had closed, bank stock was not in demand and realty and real estate securities were difficult to sell without loss. For this reason it was the desire of the appellant, as the sole residuary legatee of his father's estate, that there be no undue haste in the liquidation of assets to pay debts. He expressed the hope that all the stock of the Pohlmeyer Property Corporation would come to him, as such legatee, and suggested to the appellee that if he were permitted to manage the corporation as a going concern its profits could be made to go a long way in discharging the estate's obligations and it would be unnecessary to sacrifice assets for that purpose. This arrangement was tried for several years without success and it became necessary to relieve the appellant of his responsibilities in that connection and to liquidate many of the estate's assets which all parties in interest had hoped might be saved.

In addition to its obligation to the widow, Johanna Pohlmeyer, under the agreement settling the controversy over the ante-nuptial contract, it appeared that there were many substantial and just claims outstanding, including state and federal inheritance taxes, current property taxes, expenses in connection with the last sickness and burial of the testator, current household bills, three notes to the Second National Bank of Richmond aggregating $29,500, one note to the Fletcher American Bank of Indianapolis in the sum of $1,588.16, judgments aggregating $29,382.70 and many miscellaneous bills in comparatively small amounts, to all of which must be added the reasonable costs of administration.

In making assets to pay these numerous obligations the appellee sold the testator's interest in the partnership of Pohlmeyer, Welfer and Smith, Undertakers, for $3,269.84 less than its appraised value. Second National Bank stock appraised at $12,600 was disposed of for $11,200, a loss of $1,400. These sales were fully discussed with the appellant, his attorney and the judge of the Wayne Circuit Court, in which the estate was pending, and fully approved by them. On March 31, 1937, the appellee filed its first current accounting in which each of these transactions were reported in detail and the court thereupon entered its order finding such sales to have been made for not less than the true market value of the property involved and in all respects approving the same. The appellant, though fully advised in the premises, made no objection at the time to either transaction.

It had now become obvious to all concerned that the estate could not be fully administered without the disposal of the testator's interest in the Pohlmeyer Property Corporation. There was no market for the stock in this enterprise, all but two shares of which the appellee held as executor of the estate, and after a conference between the judge of the Wayne Circuit Court, the appellee and its attorney, it was agreed that it would be to the best interest of the estate for the Pohlmeyer Property Corporation to buy its own stock from the appellee. Money for this purpose was to be raised by the corporation, as the occasion demanded, by the sale of its real estate holdings. To carry this plan into effect the appellee, from time to time, petitioned the court for authority to vote the stock held by it in favor of the sale of certain specifically described property for not less than a designated price. These various petitions were approved by the court and appropriate orders made. As such sales were made the appellee obtained orders from the court to sell various amounts of Pohlmeyer Property Corporation stock at private sale at up-set prices and, there being no other purchasers therefor, the same was sold to the corporation and paid for with the money received from the sale of its real estate. This process was continued until all the stock held by the...