In Re Brooks Estate. Jenson v. Ogden State Bank

ELIAS HANSEN, J. This appeal is prosecuted by David' Jenson from a decree wherein he, as former administrator of the estate of Clarence W. Brooks, deceased, was directed to deliver to the Ogden State Bank, his successor as such administrator, the assets found by the court to belong to such estate. After a hearing was had upon the final account and report rendered by Jenson as administrator of that estate, the court below found that Jenson as such administrator was chargeable with $8,970.16 in assets of the Clarehce W. Brooks estate after allowing Jenson credit for all moneys properly expended by him as such administrator. The trial court ordered Jenson to pay that amount to his successor, the Ogden State Bank, together with interest thereon at the rate of 8 per cent per annum from and after June 9, 1928, until paid. Jenson complains of the judgment because, as he claims, under the evidence, he, as the former administrator of the Clarence W. Brooks estate, is not properly chargeable with so large an amount. All of the files in the Clarence W. Brooks estate are before us on this appeal; they show that Clarence W. Brooks died intestate at Ogden City, Weber county, Utah, on May 24, 1918. Mr. Brooks left surviving him as his heirs at law his widow, Mary Brooks, two brothers, three nephews, and three nieces. On August 14, 1918, Mary Brooks was appointed administratrix of the estate of her deceased husband, Clarence W. Brooks. She *508 continued to act as administratrix of the estate until her death February 2, 1924. During the whole of the time Mrs. Brooks served as administratrix, appellant acted as attorney for her personally and for the estate. The inventory and appraisement filed by Mrs. Brooks showed the estate to be of the appraised value of $58,161.15. For the purpose of fixing the inheritance tax to be paid to the state of Utah, the property of the estate was appraised at $52,582.35. The estate consisted of real property — notes, stocks, bonds, and other personal property. In the course of administration of the estate by Mrs. Brooks, various parcels of real estate and personal property were sold under order of court. On September 16, 1918, Mrs. Brooks was granted $100 per month as family allowance; the same to commence on May 24, 1918, the date of the death of Mr. Brooks. Under date of December' 8, 1919, the court fixed the inheritance tax at the sum of $1,215.51 and directed the same be paid to the state treasurer of the state of Utah. Three decrees of partial distribution were made and entered in the estate: One dated December 30, 1919, by which $8,000 was ordered distributed; one under date of August 13, 1920, by which $8,000 was ordered distributed; and one under date of February 17, 1922, by which $7,500 was ordered distributed to the heirs. Mary Brooks rendered three accounts: One under date of November 25,1919; one under date of June 30,1920; and one under date of January 31,1922. The three accounts so rendered by Mary Brooks were, by the court, approved, and accordingly an order of approval was signed by the court and filed in the cause. In the first account rendered by Mrs. Brooks under date of December 10, 1919, there appeared an item of $1,215.51 as having been paid to the state treasurer as and for inheritance tax. There also appeared in that account an item of $1,900 as and for family allowance to Mary Brooks. In the second account rendered by Mrs. Brooks no claim under the head of family allowance was made by her, but she did claim a credit of $6,500 as having been “paid to Mary Brooks.” Apparently that *509 item was for money paid to her pursuant to the first decree of partial distribution. So, likewise, in the third account of Mary Brooks dated January 31,1922, no claim was made by her for family1 allowance. She did claim credit for $4,000 paid to her as a “distributive share.” Apparently, that item was for the amount theretofore ordered distributed to her by the second decree of partial distribution. Under date of May 21, 1924, appellant David Jenson applied for letters of administration of the estate of Clarence W. Broks, deceased. In his petition for letters he alleged that the probable and approximate value of the estate was $10,000. In the order appointing him administrator it was found by the court that “there still remains as the property and assets of the said estate, not yet distributed, certain real and personal property of the probable and approximate value of $9,326.00.” The court fixed the amount of bond to be given by Mr. Jenson at $19,000 if a personal bond, and $11,000 in the event a surety bond was given. Jenson qualified as administrator and letters of administration were issued to him under date of July 21, 1924. He continued to act as administrator until upon application of some of the heirs of Clarence W.- Brooks, deceased, the court, on July 27, 1926, ordered him suspended from further acting as administrator and further ordered that he show cause why his letters of administration should not be revoked. The court fixed August 9, 1926, as the date for Mr. Jenson to show cause why his letters of administration should not be revoked. On that date he resigned as administrator. His resignation was accepted and he was ordered to render an itemized account of all his receipts, disbursements, and doings in the estate and to deliver to his successor all of the property, files, papers, and documents in his possession belonging to the estate. Thereupon letters of administration de bonis non were issued to the respondent Ogden State Bank. It continued to act as administrator until the entry of the judgment here under review. At the time Jenson resigned as administrator, he filed a report and *510 account of his administration. He also filed a report and account of the administration of the estate had by Mary Brooks covering the period from her third account to her death. Later Mr. Jenson filed an amended report and account. The judgment appealed from was made and entered after a hearing was had upon the account filed by Mr. Jenson for and on behalf of Mary Brooks and upon his amended report and account and the objections filed thereto by some of the heirs of Clarence W. Brooks, deceased. Mr. Jenson testified at considerable length concerning his account. His testimony is very unsatisfactory. It appears from his testimony that he either knew but little of the affairs of the estate, or was unwilling to testify concerning what he did know. It does appear, however, from his testimony: That during the time Mrs. Brooks was acting as administratrix most of the money belonging to the estate was received and disbursed by Mr. Jenson; that he deposited moneys belonging to the estate in various banks and1 in various accounts; that neither he nor Mrs. Brooks paid the state treasurer the $1,215.51 in inheritance tax; that while Jenson was acting as attorney for Mrs. Brooks and for the estate he, from time to time, borrowed money from Mrs. Brooks; that at one time Mrs. Brooks loaned him $15,000 ; that Mrs. Brooks owned a substantial estate independent of her interest in the estate of her deceased husband; that prior to her death Mrs. Brooks made a will in which Mr. Jenson was named as executor to serve without bond; that upon the death of Mrs. Brooks her will was admitted to probate and Mr. Jenson was appointed the executor thereof; that some money was paid to Mrs. Brooks as and for family allowance from the assets of the estate of Clarence W. Brooks, deceased, but the exact amount thereof is a matter of conjecture; that the accounts rendered by Mrs. Brooks in the Clarence W. Brooks estate were prepared by Jenson, who at the hearing of the accounts and reports of the estate testified, concerning the same; that Mr. Jenson signed the name of Mrs. Brooks to at least one of the accounts; that substan *511 tially all of the business connected with the Clarence W. Brooks estate was conducted by Mr. Jenson; that he it was who drew and signed the checks and paid the expenses of the estate and also paid to the distributees the money ordered distributed to them by the decrees of partial distribution; that after he was appointed administrator of the estate of Clarence W. Brooks, he paid to himself from the assets of that estate, without an order of court, moneys as and for attorney fee for services rendered in that estate. While Mr. Jenson denied having misapplied any of the property of the Clarence W. Brooks estate the only inference that can reasonably be drawn from the whole of his testimony is that he did appropriate to his own use a considerable portion thereof. Appellant complains of the judgment appealed from because, as he claims, he should have been, but was not, given credit for $1,215.51 which the court fixed as an inheritance tax and directed that Mrs. Brooks pay the same to the state treasurer of Utah. He also complains because the court refused to allow him credit for family allowance from the time intervening between the first and third accounts filed by Mrs. Brooks. The time intervening between those two accounts was 19 3/5 months. As already stated, the family allowance fixed by the court was $100 per month. Thus appellant claims that he should have been given credit for an additional $1,960 on account of family allowance. Apparently the court below refused to allow credit for the family allowance for the time intervening between the first and third accounts filed by Mrs. Brooks because she having failed to claim such credit, thereby waived her right thereto, and that Jenson was not entitled to credit for family allowance to which Mrs. Brooks had waived her right. In this connection it should be noted that in his account Jenson was given credit for $1,900 claimed and allowed Mrs. Brooks in her first account and he also was given credit for family allowance at $100 per month from the date of the third account to the date of the death *512 of Mrs. Brooks. It is appellant’s contention that he should have been allowed credit for $1,215.51 allowed Mrs. Brooks for the payment of the state inheritance tax and should have been allowed credit at the rate of $100 per month for the entire period extending from the date of the death of Clarence W. Brooks to the date of the death of Mary Brooks. In support of such contention appellant cites and relies upon the following cases: In re Raleigh’s Estate, 48 Utah 128, 158 P. 705, 706; Moyes v. Agee, 53 Utah 360, 178 P. 753; In re Moore’s Estate, 170 Cal. 60, 148 P. 205; In re Welch’s Estate, 106 Cal. 427, 39 P. 805; In re Nolan’s Estate, 145 Cal. 559, 79 P. 428, 429; Bacon v. Perkins, 100 Mich. 183, 58 N. W. 835, and In re Foreman’s Estate, 59 Okl. 1, 157 P. 279. The cases cited from this jurisdiction, as well as some of the other cited- cases, are authority for the doctrine that “an executor’s or administrator’s account which has been allowed can be assailed only in equity and upon the same ground as other judgments.” We, however, are unable to see how that doctrine aids appellant in the instant case. The judgment appealed from does not conflict with the order granting Mrs. Brooks a family allowance, nor may it be said to be in conflict with the order approving the payment of the inheritance tax. The former orders were in no sense revoked or amended by the judgment complained of. The judgment appealed from is but the means properly employed by the court below and calculated to enable it to enforce ultimate compliance with its former orders. It was the duty of David Jenson, as administrator of the estate of Clarence W. Brooks, deceased, to account for all of the assets of the estate which came into his possession as such administrator. On the other hand, let it be conceded that he may not in this proceeding be required to account for any property which came into his possession as the attorney for Mary Brooks while she was the administratrix of her deceased husband’s estate unless such property came into his possession, or he was able to reduce it to his possession, during the time he was acting as such adminis *513 trator. The mere fact, however, that Mrs. Brooks was entitled to a family allowance out of the estate is beside the issue, as is also the fact that the probate court approved an account wherein Mrs. Brooks claimed that the sum of $1,215.51 was due and had been paid to the treasurer of the state of Utah as and for an inheritance tax. The ultimate end to be accomplished by a probate proceeding is to vest possession, or both title and possession, of the property of the estate in those entitled thereto. The duties of an administrator are not completed until the properly of the estate has been delivered to the persons to whom the probate court directs that it shall be delivered whether it be a claim allowed against the estate or a decree of distribution. The administrator has not performed the trust imposed upon him by. law until and unless he pays the claim or delivers the property to the distributee. R. S. Utah 1933, 102-9-25, 102-11-20, 102-11-21, 102-12-19. The duties of an administrator are not fully performed until he has not only accounted for, but also distributed, as ordered by the court, all of the assets of the estate which has come into his possession as administrator. Ehrn gren v. Gronlund, 19 Utah 411, 57 P. 268. Obviously, the duties of Mrs. Brooks while she was administratrix and the duties of Mr. Jenson while he was administrator were not performed with respect to the money belonging to the estate which should have been applied to the payment of inheritance tax until the tax was paid and the property of the estate relieved from the lien of the tax. So, likewise, Mr. Jenson was not entitled to deduct from the property which came into his possession as administrator any money owing upon the family allowance unless it was actually applied to that purpose. The bond which he gave imposed upon the maker thereof a liability to account for any injury that the estate and those interested therein might sustain because of any failure of Mr. Jenson as administrator, not only to account to the court for the property which he received as administrator, but also because of any failure to deliver the assets of the estate to the *514 persons entitled thereto as ordered by the court. The estate of Clarence W. Brooks retained an interest in the $1,215.51, which should have been paid by Mrs. Brooks as an inheritance tax, until such tax was paid and the estate relieved from the lien of the tax. The same is true with respect to the family allowance. Thus David Jenson as administrator of the Clarence W. Brooks estate has no right to retain or receive credit for money which should have been, but was not, paid as an inheritance tax and family allowance. The court in which the estate of Clarence W. Birooks was being probated retained jurisdiction of the property of the estate and the administration thereof until its orders were complied with. Any other doctrine would render the court powerless to compel its officers to comply with its orders. . The controlling question therefore to be determined on this appeal is: D'id the court below by the order appealed from require appellant to deliver to the newly appointed administrator more property (after making deductions of the amount properly paid out by him) than came into his possession as administrator of the estate? The trial court in substance found that at the time of the death of Mary Brooks there was cash on hand belonging to the estate of Clarence W. Brooks the sum of $4,012.24 which was in the possession of appellant at the time he was appointed and assumed the duties of administrator of that estate; that after his appointment Mr. Jenson received the sum of $4,675.18. Mr. Jensen was charged with the total sum of $8,687.42. He was given credit for $864.60. There was thus, as found by the court, the sum of $7,822.82 which Jenson should have had on hand at the time he, on August 9,1926, resigned as administrator of the Clarence W. Brooks estate. In the judgment appealed from the court below required Jenson to pay interest on the $7,822.82 at the rate of 8 per cent per annum from August 9, 1926, to June 9, 1928. The amount thus charged against Jenson was $1,-147.34. Appellant makes no claim that he should not be charged with legal interest on the money belonging to the *515 estate from and after the time he resigned as administrator and the court directed him to deliver the assets of the estate to his successor. He does claim, however, that he was not chargeable with as much as $7,822.82 on the date he resigned, and that therefore the interest charged against him was correspondingly excessive. As heretofore stated in this opinion, appellant alleges in his petition for letters of administration of the Clarence W. Brooks estate that the remainder of the assets of the estate was of the approximate value of $10,000. In the order appointing Mr. Jenson as administrator, the court found that the approximate value of the remainder of the estate was $9,326. After appellant was appointed administrator he did not file an inventory of the property which came into his possession as administrator. After his resignation the only property which he turned over to his successor was twenty-three notes of the face value of $4,866 and some certificates of stock in various mining and1 Other companies. All of the notes were of long standing, some bearing date as far back as 1905 and none later than 1919. Nothing had been paid on any of the notes excepting $25 on one note. When in 1919 the original inventory and appraisement of the property of the estate was made and filed, a number of the notes which were delivered to the bank were appraised as of no value. All of the stock certificates were appraised as having no value. It is thus reasonable to assume that the notes and certificates which Jenson turned over to the Ogden State Bank were of no value; that when Jenson was appointed administrator he knew such to be a fact and that the notes and certificates of stock formed no part of Jenson’s estimate that the assets of the estate were at that time of the probable value of $10,000. In the third and last account rendered by Mrs. Brooks she reported cash on hand in the sum of $9,581.63 after deducting all of the money claimed to have been paid out by her. Of the cash on hand when the third account was rendered the sum of $7,500 was distributed to the heirs pursuant to the third decree of par *516 tial distribution leaving cash on hand1 in the sum of $2,-081.63. According to the report and account' which Jenson filed for and on behalf of Mrs. Brooks as administratrix, she received assets belonging to the estate in the sum of $3,048.43 after her third account was approved. While Jenson was acting as administrator of the estate, he, according to his statement and report, received cash belonging to the estate in the sum of $'4,645.18 in addition to $39.97 which was on deposit to the credit of Mary Brooks, administratrix, in two Ogden banks. Thus Mrs. Brooks was chargeable as administratrix with , cash of the estate in the sum of $5,130.06 at the time of her death. Add to that the money of the estate which Jenson received as administrator, exclusive of the $39.97, on deposit in the banks in the name of Mary Brooks, administratrix, we have a total cash item of $9,775.24. There should also have been on hand the $1,215.51 for which credit was taken as having been paid as inheritance tax but which was not paid, making a grand total of $10,990.75. In his final account Jenson was allowed credit, including his commission as administrator, in the sum of $864.70. No vouchers were produced which showed, or tended to show, that he was entitled to any additional credit. He did claim an attorney fee in the sum of $12,500 of which amount he stated he had received $10,268.34. During the time Mary Brooks was acting as administratrix, attorney’s fee in the sum of $4,750 was allowed. The court below refused to allow Jenson any fee in addition to the $4,750 paid to him during the time Mrs. Brooks was acting as administratrix. Appellant does not assign as error the refusal of' the court to allow him additional attorney’s fees. No claim was made by Jenson that he as executor of the last will and testament of Mary Brooks, deceased, had received from himself as administrator of the estate of Clarence W. Brooks, deceased, any moneys as and for the family allowance awarded to Mrs. Brooks in the Clarence W. Brooks estate. From what has been said it will be seen that, if the re *517 mainder of the estate of Clarence W. Brooks was of the approximate value of $10,000 at the time Jenson was appointed administrator, there should have been on hand at the time he resigned to be turned over to his successor at least the sum of $7,822.82, and, likewise, it appearing that the state inheritance tax was not paid and there being no evidence tending to show that Mrs. Brooks actually received more than $1,900 in family allowance, there should have been cash in the hands of Jenson to be turned over to his successor at least as much as he was directed to turn over. No claim is made that any of the accounts of Mrs. Brooks which were prepared by Mr. Jenson were in error. Nor is it claimed that she misapplied any of the money belonging to the estate. Neither does Jenson claim or admit that he misapplied any of the money of the estate while he was acting as attorney for Mrs. Brooks, but on the contrary he testified that the remainder of the money belonging to the estate was in his possession at the time he was appointed administrator. It would be a rather anomalous position for appellant to contend that the trial court was in error in finding that he (appellant) acted fairly and honestly in his dealing with Mrs. Brooks while acting as her attorney in managing the business of the estate. If, as he testified, he did deal honestly with the property belonging to the estate during the time he was attorney for Mrs. Brooks as administratrix, there is no escape from the conclusion that he had in his possession at the time he was appointed administrator at least the amount of money and property found by the probate court. Moreover, if appellant, during the time he was acting as attorney for Mrs. Brooks, misapplied any of the money belonging to the estate, it became his duty, after he was appointed administrator, to recover the same for the use and benefit of the estate. If Mrs. Brooks misappropriated the $1,215.51 which should have been paid to the state as an inheritance tax, it was likewise the duty of Jenson, after he was appointed administrator, to recover the same either from her estate or upon the bond *518 which she gave as administratrix of the Clarence W. Brooks estate. R. S. Utah 1933, 102-11-10. If he failed to perform such duty to the injury of the estate and those interested therein, he and his bondsmen are liable for the dereliction. An administrator of an estate occupies a fiduciary relation with respect to the estate and those interested therein. His duties require him to exercise the utmost good faith in dealing with property intrusted to his custody. When called upon to render an accounting, he must be able to show that he has faithfully performed that duty. If he fails to do so, he and his bondsmen must make good any loss sustained by reason of such failure. The judgment appealed from is affirmed. Respondents are awarded costs. FOLLAND, J., concurs.