Pugh v. Fowlie (In re Penney's Estate)

• Court: Wisconsin Supreme Court
• Writing for the Court: WICKHEM
• Citation: Pugh v. Fowlie (In re Penney's Estate), 225 Wis. 455, 274 N.W. 247 (Wis. 1937)
• Decision Date: 21 June 1937
• Parties: In re PENNEY'S ESTATE. PUGH et al. v. FOWLIE (four cases).

225 Wis. 455

274 N.W. 247

In re PENNEY'S ESTATE.^*PUGH et al.

v.FOWLIE (four cases).

Supreme Court of Wisconsin.

June 21, 1937.

Appeals from separate orders of the County Court of Waupaca County; F. B. Heinemann, judge.

Reversed, and remanded for further proceedings.

In the matter of the estate of A. M. Penney, deceased.

The proceedings here involved were initiated by a petition filed July 10, 1936, by Rose Penney Pugh and Etta Penney Townsend praying, among other things, that L. S. Peterson, John Fowlie, as executors of the will of A. M. Penney, deceased, and John F. Jardine, Ralph E. High, and S. W. Johnson, as administrators with the will annexed of the said estate, be cited before the county court and submit to examinations as to all of their actions and doings as such executors and administrators for all the time that they acted in said estate; that the court determine upon the citation and the answer of the respondents and the records, files, documents, papers, and proceedings the validity or invalidity of any or all of their said actions, their liability for waste, and what sums, if any, should be surcharged against their accounts; that if upon the hearing it should appear that respondents or any or all of them have proceeded contrary to the provisions of the last will of decedent and contrary to law, or that they have committed waste of the estate, they be required to account; that all orders and proceedings heretofore made in excess of the jurisdiction of the court be vacated and set aside. Upon the hearing, respondents objected to the jurisdiction of the court in said citation proceedings. The court refused to entertain a reply or answer to the petition or any demurrer thereto, whereupon respondents refused to answer any interrogatories. There followed the order entered October 26, 1936, adjudging each of the respondents guilty of contempt of court. Respondents appeal. The material facts will be stated in the opinion.Eberlein & McCarthy, of Shawano, for appellants Fowlie and Peterson.

Goggins, Brazeau & Graves, of Wisconsin Rapids, for appellants Jardine and High.

McGovern, Curtis & Devos, of Milwaukee, for respondent.

WICKHEM, Justice.

The petition shows that deceased died testate January 27, 1922, at Waupaca; that petitioners are two of the beneficiaries namedin the will; that the last will and testament named L. S. Peterson and John Fowlie as executors; that the will was duly admitted to probate and letters testamentary issued to the named executors on January 31, 1922; that the executors duly qualified and acted as executors until August 17, 1926, when they resigned and filed their final account for the period of their administration; that on August 17, 1926, John F. Jardine was appointed administrator with the will annexed of said estate and thereafter qualified and acted until October 1, 1930, on which date he resigned, whereupon Ralph E. High was appointed administrator with the will annexed, duly qualified and acted until November 10, 1931, when he resigned, and thereupon on November 17, 1931, S. W. Johnson was appointed as administrator with the will annexed, qualified, and has since been the duly appointed, acting, and qualified administrator of said estate. All of the documents, files, papers, and proceedings in the matter of the estate are referred to by the petition and expressly incorporated. The petition proceeds to set out the pertinent paragraphs of the will, which need not be here considered in detail further than to say that the will directs the executors to sell at best advantage all the items of the estate and to establish a trust fund with such sums as are in excess of the requirements for expenses of the estate. There follow directions concerning the duration, and beneficiaries, of the trust fund. The petition alleges that the real estate of decedent was appraised at $107,825 and personal property valued at $105,763.22, making in all a total of $213,588.22; that the homestead devised in the will to the widow of deceased was appraised at $6,500; the summer cottage devised to Rose Penney Pugh at $3,000; the post office building in the city of Waupaca, devised to Mary Jane Penney, at the sum of $7,000, making a total appraised value of property specifically devised in the sum of $16,500. It is alleged that by paragraph 6 of the will it was the duty of the executors immediately to sell at best advantage all of the estate except the three parcels specifically devised and to establish a trust fund in accordance with the requirements of the will; that upon the appointment of the executors Peterson and Fowlie, they failed or neglected to administer the estate as directed in the will and entered upon an utterly different plan of administration and purported to manage the estate as though it constituted a going concern; that they did not proceed to sell the items of real estate or to establish the trust fund and completely ignored the directions of the will and the intention of the testator. That the real estate consisted of a motion picture theater that had cost the testator $100,000, and been operated by him; the building and premises on which a restaurant was conducted and had been operated by testator; a store located on said premises; four farms in Waupaca county that had been conducted by the testator; and some small parcels of real estate of minor value. That during the period from the testator's death to the year 1932, the market for real and personal estate in Waupaca county was more favorable for the sales of such property than it had been at any time theretofore; that in the face of this, the executors neglected to sell the real estate, except one farm and two or three parcels of minor value; that instead they attempted indefinitely to manage the property, and that as a result of their operations they wasted and lost large sums of money each year except one. That according to their own reports in the year 1922, they sustained a net loss of $1,104.36; in 1923, $4,432; 1924, $5,332.63; 1926, $4,510.87; 1925, they reported a gain of $2,868.94. That the successors to the said executors, Jardine, High, and Johnson, continued to disregard the intentions of the testator and the provisions of the will and to manage the property instead of selling it, with the result that in 1927, the net loss was $1,486.86; 1928, $1,462.34; 1929, $6,287.93; 1930, up to September 13, $8,700.28; September 13, 1930, to October, 1931, $3,873.45, making a total loss of $35,032.04. That since then there were similar losses as reported by successor administrators for each year; that as a result of waste and mismanagement, the estate has little or no value, and the petitioners have been deprived largely of their rights as beneficiaries under the will; that the executors charged and were paid large sums in compensation for their management of the property as and for extraordinary services; that such services were of no value to the estate but greatly harmed it; the same allegation is made with reference to the successor administrators, and the demand is made that such money be returned to the estate. It is further alleged that the executors Peterson and Fowlie, in place of converting the real estate into money, put a mortgage of $40,000 on all of the real estate; that they used this money in operating the estate at a loss; that the documents and papers are in such condition that it is difficult, without the expenditure of more time than petitioners have heretofore had, to determine all of the illegalities, void acts, and acts of waste by the executors and administrators; that the executors and administrators should be cited to appear and be examined at length regarding their various transactions. The petition concludes, as heretofore indicated, with demand for the citation of the executors and administrators.

Thereafter, the citation issued, and there followed the refusal of the executors and administrators to answer questions and the adjudication of contempt.

The record discloses the following orders material to contentions made upon this appeal: An order dated August 17, 1926, which appears inadvertently not to have been signed by the judge, recites the appearance in person of Fowlie and Peterson, as well as Rose Penney Pugh and Etta Penney Townsend, among others, and the agreement of the parties as to the amount of the executors' fees. It was therein ordered that the resignation of Fowlie and Peterson be accepted, and their final account approved and allowed; that the executors pay the balance of the money in their hands to the administrator to be appointed; and upon filing satisfactory evidence of such payment, that they be released and discharged from all further liability upon said estate, and their bonds as such executors canceled.

Under date of August 18, 1926, an order was signed by the county judge reciting that vouchers showing compliance with the order of the 17th having been filed, “It is ordered that L. S. Peterson and John Fowlie, as executors of said estate, be and they are hereby discharged, their bond released, and the order made absolute.” There is an order signed by the county judge dated October 1, 1930, reciting the appearance of all the interested parties, including the petitioners with reference to the resignation of J. F. Jardine as administrator de bonis non with will annexed and the filing of his final account. The order appoints Ralph High as administrator and directs the discharge of Jardine upon filing the usual receipt with the court. Receipts were filed by High after his qualification showing receipt by him of the property referred to in the order of October 1. An order was made October 28, 1931, allowing High's account, accepting his resignation, and ordering that he “be released and discharged from all further liability upon the estate and his bond” canceled upon filing receipts from his successor, followed by an order dated November 17, 1931, reciting...