In re Sanborn's Estate

109 Mich. 191 | Mich. | 1896

Montgomery, J.

On the 7th day of April, 1891, the probate court for St. Clair county made an order allowing the final account of John P. Sanborn, surviving executor. By an order of the circuit court which was under review in Sanborn v. Mitchell, Circuit Judge, 94 Mich. 519, leave was given to the legatees named in the will to appeal from this order. An appeal was taken by Mehitable D. Sanborn and Frederick D. Sanborn on their own behalf, and on behalf of William H. Sanborn, an incompetent person, and Elizabeth A. Botsford and Mabel Sanford Botsford, infants. The case was transferred to the circuit court of Wayne county, and on the trial of the issue the circuit judge held that under the terms of the will of James W. Sanborn, as to the transactions involved in the final account, John P. Sanborn was acting as a trustee, and not as executor, and was not bound to account to the probate court, and refused to enter upon a hearing of the account, and vacated and set aside the proceedings in the probate court allowing the account, for the reason that the accounting should be had in equity. Each party has sued out a writ of error.

John P. Sanborn contends that the infant Botsford children were not parties to the appeal, and that the ap-. pellants Mehitable D. Sanborn and Frederick D. Sanborn are bound by agreement that the account should be allowed, as it was, by the probate court, and that, therefore, the order should not be set aside on their appeal, but that the order of the circuit court should have been for a dismissal of the appeal. The legatees contend that the agreement by which they assented to the allowance of the account by the probate court was obtained by fraud, and that the allowance of the appeal from the probate court, made after a showing on this subject, together with the decision of this court in Sanborn v. Mitchell, refusing to disturb the order, concludes the parties, and that the minor children are before the court, though informally; and, on their own appeal, the legatees assert that under the will the powers conferred on John P. Sanborn were executorial, and that he was not a trustee, except as executor, and, furthermore, that if, under the terms of the will, it be held that certain of the duties which he may be or has been called upon to exercise are those of a trustee, yet until there has been an accounting in the probate court, in which he has charged himself as trustee, and has set apart the funds received by himself as executor to himself as trustee, the probate court has jurisdiction to call him to account.

1. Application for leave to appeal was made as well on behalf of the infants as on behalf of M. D. Sanborn and Frederick D. Sanborn, and the application is so treated in Sanborn v. Mitchell. The failure to have a guardian ad litem appointed was an irregularity. The executor has not moved to dismiss the appeal as to them. A guardian ad litem has been appointed for the infants in this court, and we do not think their appeal should now be dismissed. The informality can still be cured by the appointment of a guardian ad litem in the circuit.

To remove any misapprehension which might arise from the language in a portion of the opinion in Sanborn v. Mitchell, it is proper to say that we do not think the question of whether there was fraud in inducing Mehitable D. Sanborn and Frederick D. Sanborn to consent to the allowance of the executor’s account can be properly tried on the accounting in the circuit. This would lead to confusion. The questions on this accounting relate to the administration of the estate, the charges of the executor, etc. Whether these legatees are estopped can better be determined on an application for distribution of the estate.

2. No case has been presented in this court in which the question as to the duty of an executor named in a will containing such powers as those in the present will, to account to the probate court, has been directly passed upon. In Cranson v. Wilsey, 71 Mich. 356, the executor of a will containing similar provisions was sued at law on his bond, the bondsman being joined with him. In that case the will required the fund to be invested in real-estate securities, at 10 per cent. In the opinion of the court, by Mr. Justice Campbell, it was said:

“If the property had been invested in real-estate securities, as required, the question might have arisen whether this was not equivalent to such a compliance with the order of distribution [which had been previously made by the probate court] as would have changed the nature of their holding. Upon this question we express no opinion. It is at least a doubtful proposition. But we think it is a dangerous and incorrect doctrine that executors can discharge themselves of their official responsibility without doing some act to change the character of their holding, and place the fund safely where it ought to be.”

/ It is unquestionably true that the same person may be named as executor in a will, and by the same instrument constituted a trustee. Whether these executors are constituted trustees, in such a sense that they might, upon a final accounting, discharge themselves from the obligation of their bond by showing a proper investment of the remaining assets in their hands, we need not determine. No such accounting has been had in this case, and the executor insists that it is not his duty to make one, although annual accounts were for years rendered to the probate court, in which no attempt was made to distinguish the trust funds, or show where or how invested, as distinguished from the general funds of the estate. Assuming that the will creates such a trust as is contended, we think that, before the executor can discharge himself of his official responsibility, he must do some act to change the character of his holding, and show that the fund is placed safely where it ought to be. This question has been considered by the courts of many of the States, and this duty is recognized in the better reasoned of the cases in which the question has been raised. In re Hood’s Estate, 98 N. Y. 363; In re Higgins’ Estate, 15 Mont. 474; Hall v. Cushing, 9 Pick. 395.

In Hood v. Hood, 85 N. Y. 561, the will bequeathed all the residue of the estate, real and personal, in trust to sell and dispose of said real estate, and collect and realize the personal estate, and, after paying certain incumbrances, to divide the balance into as many shares as there were children, and pay the income of each share to the wife of the deceased, if living, and, if not, to the legal guardian of the child to whom the share belonged, until the child should attain the age of 21 years, and, when the child should reach that age, to pay over the share set apart for him, with accumulations. By the twelfth clause of the will the wife and son of the testator were appointed "executors and trustees,” with, power to sell or lease his real estate, in their discretion. In an action on the bond of one of the executors, for failing to invest the funds, and for converting portions of the same to his own use, it was contended that the funds misappropriated were in his hands as trustee, and not as executor. The court held that the proceeds of land sold were .legal assets in the hands of the executor, for which he was accountable as such; citing and following Stagg v. Jackson, 1 N. Y. 206. The same case was again before-the court of appeals in Re Hood’s Estate, 98 N. Y. 363, where it was held that, whether or not, under the will, it was possible for the executor to exchange the character of executor for that of trustee, he had not done so; he not having credited himself, in his accounts as executor, with any sums turned over to himself as trustee. This ruling was again reaffirmed in Re Hood’s Estate, 104 N. Y. 107. See, also, Everson v. Pitney, 40 N. J. Eq. 539; Hall v. Cushing, 9 Pick. 395.

The judgment will be reversed, and the case remanded to the circuit court, with direction to proceed to an accounting. Costs will be awarded against the executor.

The other Justices concurred.