Williams v. Schee
| Decision Date | 24 June 1932 |
| Docket Number | No. 41256.,41256. |
| Citation | 214 Iowa 1181,243 N.W. 529 |
| Parties | WILLIAMS v. SCHEE (TWO CASES). GODLOVE v. SCHEE (TWO CASES). |
| Court | Iowa Supreme Court |
OPINION TEXT STARTS HERE
Appeal from District Court, Warren County; J. H. Applegate, Judge.
This appeal involves four separate and distinct cases, which were tried in the district court. The cases of Robert Williams, plaintiff-appellant, v. Elmer Schee, administrator of the estate of Lewis Schee, deceased, defendant-appellee, and A. T. Godlove, plaintiff-appellant, v. Elmer Schee, administrator of the estate of Lewis Schee, deceased, defendant-appellee, appear to have been brought in probate; while the cases of Robert Williams, plaintiff-appellant, v. Elmer Schee, defendant-appellee, and A. T. Godlove, plaintiff-appellant, v. Elmer Schee, defendant-appellee, seem to have been commenced at law. Four separate and distinct judgments were entered in the district court. In one case, Robert Williams, as the plaintiff-appellant, sought to recover from Elmer Schee, administrator of the estate of Lewis Schee, deceased, defendant-appellee, a claim based upon the theory that Lewis Schee in his lifetime was a member of a copartnership operating the Bank of Milo. Likewise, in another case, A. T. Godlove, a plaintiff-appellant, sought to recover a judgment against Elmer Schee, administrator of the estate of Lewis Schee, deceased, defendant-appellee, on a similar theory. Then Robert Williams, plaintiff and appellant, demanded relief against Elmer Schee, as defendant and appellee, in the third case, on the theory that the latter, as administrator, continued the aforesaid Bank of Milo without authority after the death of Lewis Schee. Also in the fourth case, A. T. Godlove, plaintiff and appellant, sought judgment against Elmer Schee, defendant and appellee, on the same theory as that advanced by Robert Williams in the case last above described.
These cases were tried to the district court, and that tribunal found for the defendant in each case, and dismissed the petitions of the respective plaintiffs. From the judgment entered in each respective case, the defendants appeal.
Affirmed.
Howard L. Bump, of Des Moines, for appellants.
Ben J. Gibson, of Des Moines, for appellee.
The Bank of Milo, also known as Schee Brothers & Co., was apparently organized as a copartnership in 1898 or 1899. In 1920, the partners were John F. Schee, James Schee, Samuel Shaw, Nathan Schee, and Lewis Schee. A Mr. Wikle appears to have owned some qualified interest in the bank, but apparently was not a partner. After 1920, the membership in the partnership remained the same until March 12, 1921, when Lewis Schee died. Following the death of Lewis Schee, the surviving partners seem to have conducted the banking business until May 17, 1926, when the institution closed and was finally liquidated through a bankruptcy proceeding in the federal District Court of the United States, in and for the Southern District of Iowa.
Two administrators were in due time appointed for the estate of Lewis Schee. Elmer Schee now alone, so far as the present controversies are concerned, is the duly qualified and acting administrator of the estate of Lewis Schee, deceased. He is the defendant-appellee in the cases of Robert Williams, plaintiff and appellant, v. Elmer Schee, administrator of the estate of Lewis Schee, deceased, defendant and appellee, and A. T. Godlove, plaintiff and appellant, v. Elmer Schee, administrator of the estate of Lewis Schee, deceased, defendant and appellee. The record is not clear concerning why the second administrator did not continue as such.
Upon the appointment of the administrators, the statutory notice thereof was duly given on March 31, 1921. Although the statutory notice was thus given, Robert Williams and A. T. Godlove, appellants, filed no claims against the estate until the present suits were instituted on August 18, 1930. This was approximately nine years after the foregoing notice had been given. So, too, the commencement of these actions was about four years after the Bank of Milo had closed.
Robert Williams and A. T. Godlove, appellants, were depositors in the Bank of Milo at the time it ceased doing business. Each depositor apparently received 37 per cent. of his claim through the bankruptcy proceedings. In order, then, to obtain the balance due on the respective claims, Robert Williams and A. T. Godlove, the appellants, commenced the present proceedings. As said in the preliminary statement, these proceedings constitute four separate and distinct actions. Two cases are brought by the appellant, Robert Williams. He attempts in one case to obtain judgment against the appellee, Elmer Schee, administrator of the estate of Lewis Schee, deceased, and in the other, this appellant endeavors to obtain judgment against the appellee, Elmer Schee, individually. Likewise two cases were commenced by A. T. Godlove. Also, he in one case attempts to recover judgment against the appellee Elmer Schee, as administrator of the Lewis Schee Estate, and in the other this appellant demands judgment against the appellee, Elmer Schee, individually.
The appellants attempt to obtain judgment against the appellee, administrator, upon one of the following three theories:
First. That the banking partnership from and after the death of Lewis Schee until the institution closed was in the process of liquidation. Therefore, it is claimed by the appellants that the estate is liable (a) for the partnership debts incurred prior to Lewis Schee's death, and (b) for the debts incurred as an incident to the liquidation of the partnership business after Lewis Schee's death.
Second. It is said by the appellants that they are entitled to recover against the administrator for the reason that such administrator, by investing new capital in the partnership, thereby made the estate a partner in a new enterprise after Lewis Schee's death, and that the claims sought to be established by the appellants are debts of the new concern, and
Third. It is contended by the appellants that there are equitable circumstances entitling them to file their claims against the Lewis Schee estate, even though more than one year has elapsed since the statutory notice was given of the administrators' appointment.
Then to establish their right to recover against the appellee, Elmer Schee, individually, the appellants rely upon an alternate proposition; that is to say, they claim that if the Lewis Schee estate were not authorized to engage in the banking business after his death, then in that event Elmer Schee, the administrator, who, under such circumstances, involved the estate in an unauthorized enterprise, himself thereby became personally liable.
These contentions of the appellants will be considered in the following order.
[1] I. Is the estate of Lewis Schee liable to appellants on the theory that the claims held by them were incurred as an incident to the liquidation of the Bank of Milo? Obviously not under the record here presented. Appellants, as before explained, were depositors of the bank. They have no other claim. Those deposits were not accepted from either appellant for the purpose of liquidation. On the contrary, each deposit was accepted because the surviving partners were continuing the bank as a new partnership after the death of Lewis Schee. This was the basis upon which appellants made their deposits.
According to the record, each one of them understood that the bank was continuing as a going concern. Neither appellant thought, or had reason to think, that any deposit thus made was for the purpose of liquidating the bank. Apparently the administrators of the Lewis Schee estate obtained an order to sell his interest therein. This interest of the estate was merely nominal, for its value would not exceed $250. So it appears that further liquidation of the bank was not considered necessary by the parties interested.
Consequently, under all the circumstances, there is no ground for recovery against the estate on the theory here discussed.
[2] II. In the second place, it is argued by the appellants that they are entitled to recover against the administrator because their deposits were placed in the bank after the district court, having charge of the probate proceedings, authorized the administrators to continue the business as a new partnership. It is important to know whether the district court did authorize the administrators to thus continue the partnership business. The old partnership was dissolved by the death of Lewis Schee. Ayres v. C., R. I. & P. Ry. Co., 52 Iowa, 478 (local citation 491), 3 N. W. 522;Young v. Scoville, 99 Iowa, 177, 68 N. W. 670;National Bank of Maryland v. Hollingsworth, 135 N. C. 556, 47 S. E. 618, local citation 622; Bank of Monroe v. Drew Investment Co., 126 La. 1028, 53 So. 129, 32 L. R. A. (N. S.) 255; 20 Ruling Case Law, 989, IX, § 225; 47 Corpus Juris, 1111, § 767.
That is the law unless: First, the decedent left a will authorizing the continuation of the partnership, which proposition after the decedent's death was accepted by the surviving partners; or, second, the contract of partnership itself authorizes a continuation of the partnership. 20 Ruling Case Law, 989, IX, § 225. Here Lewis Schee, the decedent, left no such will, nor was there a partnership contract containing the stipulation above contemplated. There was no order of court in the case at bar authorizing the administrators to continue the old or to formulate and operate a new partnership.
[3] A claim is made by the appellants, however, that there was an order of court which by implication amounted to the authorization of the administrators to continue the partnership after Lewis Schee's death. Apparently a claim was filed against the estate for $2,500. Said claim, it seems, arose because of the failure of one Clayton, an employee. Upon the presentation of that claim, the district court allowed it, and the administrators paid the same. Manifestly this...
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