Case ID: ohio-st_79/html/0103-01.html
Source: Caselaw Access Project
Author: {"author": "Spear, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

McMahon, Admr., v. Ambach & Co. et al.
    
      Settlement of estate of decedent — Allowance to administrator — For extra services — Part of account — Cannot take effect until court acts after notice — Exceptions to allowance — Constitutes direct attack — Subject to review.
    
    1. The statutes of the state bearing upon the settlement in the probate court of the estates of deceased persons, taken together, show that the allowance to an administrator for extraordinary services in the settlement of the estate is part of the statement of his account, and is to be considered by the court accordingly.
    2. Whether the allowance is in fact made at the time of or prior to the filing of a settlement account, such allowance cannot take effect as prejudicing the rights of others interested in the settlement of the estate who have not had notice until the court, after legal notice, acts upon the settlement account itself.
    3. Exceptions to such allowance in the account by creditors constitute a direct attack on the allowance, and not a collateral attack, and the allowance is then subject to review upon the exceptions the same as any other disputed item of the administrator’s account.
    (No. 10736
    Decided December 1, 1908.)
    Error to the Circuit Court of Franklin county.
    
      Facts necessary to an understanding of the question decided are stated in the opinion.
    
      Mr. H. H. McMahon, for plaintiff in error.
    An examination and comparison • of Sections 6188 and 6165 show that there is no intention to confine the making of an allowance to the settlement of an account.
    In some states it is expressly provided by’ statute that “upon the final settlement” or “upon any settlement” the court may make allowances; in Ohio, however, no such restriction is placed upon the power of the court.
    It is well settled that these costs, expenses, compensation and charges of the administrator are “to be first paid” before applying the balance to the payment of liens or unsecured claims. Stone v. Strong, 42 Ohio St., 53.
    If allowances were exclusively a matter of accounting it would be impossible to apply the rule declared in Stone v. Strong. As a matter of fact, the order of confirmation and distribution fixes the amount of costs, expenses, compensation and charges to be paid and orders their payment before the payment of liens.
    It has been held that the probate court can make an allowance to the attorney of a deceased assignee in insolvency and order the same paid by the trustee for creditors upon an application made for that purpose. Kittridge v. Miller, 12 C. C., 128, 56 Ohio St., 779.
    The circuit court of the first circuit suggested the same practice for fixing an allowance for the attorney of an administrator. Mellen v. West, 5 C. C., 89.
    This court has held that until allowed by the probate court, the compensation of an administrator or executor to which he may be entitled in the settlement of. an estate, cannot be attached, or by any similar process, appropriated to the payment of his claim by any creditor of such executor or administrator. Overturf v. Gerlach, 62 Ohio St., 127.
    The making of an allowance is not an adversary proceeding; it is an ex parte proceeding in rem; special notice to interested parties is not required.
    In Ohio, probate procedure, except where it has been expressly modified by statute, is procedure in rem; and orders of the probate court are binding upon the whole world. The administration of an estate is a proceeding in rem; as is the grant of probate, the grant of letters testamentary, of administration and of gxiardianship. Until changed by statute the sale of decedent’s real estate to pay debts was in rem. The making of allowances is in rem.
    
    Unless the statutes expressly require special notice to interested parties of any particular step in the administration, no such notice is necessary. St. Clair v. Morris; 9 Ohio, 16; Heck v. Heck, 34 Ohio St., 369; Railway Co. v. Beard, Admr., 20 C. C., 681; Rockel’s Probate Practice, Section 543; Shroyer, Gdn., v. Richmond, 16 Ohio St., 455; Bensen v. Cilley, 8 Ohio St., 604; Sheldon’s Lessee v. Newton, 3 Ohio St., 494; Robb v. Lessee of Irwin, 15 Ohio St., 689; Johnson, Exr., v. John
      
      son, 26 Ohio St., 357; Thompson v. Steamboat, 2 Ohio St., 27.
    A proceeding in rem cannot be rendered adversary except by legislative act.
    It has never been claimed that the statutes expressly required special notice of an application for an allowance; the contrary is apparent. It has, however, been urged that the making of an allowance is a matter of accounting and that notice of the settlement of an account is required; that because notice of the settlement of an account is required, the necessity of notice of an allowance will be inferred; and that common justice demands that interested parties shall have notice of the making of an allowance.
    From time to time, it has seemed wise to the legislature to transform some of the probate proceedings; to change them from ex parte proceedings in rem to adversary proceedings; to require notice to interested parties and even to make notice jurisdictional. Without legislative action, however, no change is possible and until legislative action probate proceedings remain ex parte and in rem.
    
    To transform a proceeding in rem into an adversary proceeding, it is essential that the statute, making the change, should give to the proceeding every element of adversary character. It is not sufficient to require the making- of parties, or to require special notice to parties, but the notice must expressly be made jurisdictional. If such notice is not exnressly made jurisdictional, failure to give notice will not render the order void, but only erroneous.
    
      The proceeding by an executor or administrator to sell real estate to pay debts was in its origin and nature a pure probate proceeding in rem, ex parte and summary; to-day that proceeding is fully adversary. The steps by which this change has been effected illustrate and conclusively establish the propositions above stated. Ewing’s Lessee v. Higby, 7 Ohio, part 1, 198; Ewing v. Hollister, 7 Ohio, part 2, 138; Lewis v. Lewis’ Admx., 15 Ohio, 715; Lessee of Snevely v. Lowe, 18 Ohio, 368; Act of 1831, 3 Chase, 1782, Section 31; Holloway v. Stuart, 19 Ohio St., 472.
    The probate court is a court of record competent to decide on its own jurisdiction and to exercise it to final judgment without setting forth the facts and evidence on which it is rendered. Rockel’s Probate Practice, Section 22, note 13; Shroyer v. Richmond, 16 Ohio St., 465; Railroad Co. v. Belle Centre, 48 Ohio St., 273; Heckman v. Adams, 50 Ohio St., 305.
    The records of the probate court import absolute verity; its judgments and orders are conclusive upon the whole world until vacated or reversed for error in direct proceedings instituted for that purpose. They are not subject to collateral attack, and, in a collateral inquiry, it will be conclusively presumed that the order was made upon a proper showing, by the proof of all the facts necessary to authorize it and parol evidence cannot be received to disprove the facts necessary to sustain the order. Lessee of Swazey’s Heirs v. Blackman, 8 Ohio, 5; Shroyer v. Richmond, 16 Ohio St., 455.
    Orders of allowance are subject to direct attack by appeal and error. Kittridge v. Miller, 56 Ohio St., 779; Stone v. Strong, 42 Ohio St., 53; Ballard v. Mack, 3 O. L. R., 249.
    An ex parte allowance to' the attorney of a receiver made upon the application of the receiver is not void, and the regularity of such allowance cannot be inquired into upon, the settlement of the receiver’s account. In re Commonwealth Fire Ins. Co., 32 Hun, 78.
    
      Mr. lohn R. Horst and Messrs. Huggins, Huggins & lohnson, for defendants in error.
    It is contended that allowances of compensation to administrators are necessarily a part of the account; that the probate court is without jurisdiction to make such allowances ex parte; and that, if so made, they are not binding upon persons interested in a 'settlement of an estate. Such allowances to be binding must be made upon the settlement of the account of the administrator, and after due notice of such settlement as is required by law.
    Article IV, Section 8, Constitution of Ohio, fixes the jurisdiction of the probate court in the settlement of the accounts of executors and administrators.
    Section 524, Revised Statutes, provides that the jurisdiction of the probate court shall be exclusive in certain matters therein stated.
    Section 6175, Revised Statutes, provides for the filing of an account by an executor or administrator.
    Provision for notice to interested parties is found in Section 6402, Revised Statutes. This section also recognizes the right of such interested parties to file exceptions to the account.
    A trial of exceptions to an account of an executor or administrator is provided for in Section 6168, Revised Statutes.
    Section 6407, especially provides that a decision of the probate court in the settlement of an account of an executor or an administrator may be appealed to the common pleas court.
    See paragraph three in Sections 5996 and 6006, Revised Statutes, relating to the bonds of executors and administrators, and especially providing when no compensation may be allowed to executors and administrators.
    Compensation to executors and administrators is provided for in Section 6188. This section provides for both legál and extraordinary compensation.
    The importance of notice of the settlement of an account is recognized by Section 6187, Revised Statutes, in that this section provides that the account may be opened within eight months after a settlement, if the settlement be made in the absence of any person adversely interested and without actual notice to him.
    Failure to serve notice on beneficiaries under the will of the pendency of a motion to fix the amount due the executor and trustee for extraordinary services, deprives the court of jurisdiction to hear and determine the motion. Ballard v. Mack, 3 O. L. R., 240.
    If jurisdiction of the subject-matter of the proceedings is acquired on the filing of an account the court had none prior thereto. In re Morrison, 8 N. P., 385.
    The legislature has laid down and provided a method by which extraordinary compensation can be allowed and it necessarily follows that that negatives any other method. To invoke the juris-, diction of the probate court over the subject-matter, the accounting, and that it is necessary to file an account in the probate court, is sustained by the following decisions: Jones, Admr., v. Green, 21 C. C., 96; In re Baker et al., 47 W. L. B., 559; Smith v. Rhoades & Wilt, 68 Ohio St, 500; Raab’s Estate, 16 Ohio St., 274.
    The reports are full. of litigated cases relating to executors’ compensation, and in almost every case the contention is brought, into court by exceptions to his account. Campbell, Admx., v. McCormick, 1 C. C., 504; Cairns, Exr., v. Hedges, 2 C. C., 103; In re Estate of Johnson, 4 N. P., 156; In re Estate of Wolfe, 4 N. P., 336.
    It is incumbent upon the administrator to produce evidence to prove that the extraordinary services were performed and that they were reasonably worth the amount asked. If he fails to make this proof, this court cannot allow him the compensation asked. Section 6188, Revised Statutes; In re McAlpine, 38 W. L. B., 231; Rockel’s Probate Practice, Sections 508 and 659; Chatfield & Wood v. Swing & Mellen, 7 Am. L. Rec., 326; Thomas, Admx., v. Moore, etc., 52 Ohio St., 200; Woerner on Administration, Section 515.
   Spear, J.

The circuit court’s judgment was an affirmance on error of the judgment of the court of common pleas. The latter judgment was rendered upon a trial on appeal from the judgment of the probate court of Franklin county in the matter of certain exceptions by the defendants in error, Ambach & Co., and others, to the second partial account of the plaintiff in error, Flarry H. McMahon, as administrator of the estate of Robert F. Burt, deceased. The exceptions which require consideration here relate wholly to an allowance by the probate court of fifteen hundred dollars to the administrator for extraordinary services claimed to have been rendered by him in the settlement of the estate, and it is not necessary to set out the minutiae of the record beyond a sufficient statement to show how the legal question involved in the controversy here arose.

The account to which exceptions were taken by the creditors, defendants in error, was filed in the probate court June 28, 1901. The fifteen hundred dollar allowance appears as the last item of the account in these words and figures, viz.:

“To FI. H. McMahon, administrator, allowance on account of extraordinary services fixed by the court, $1,500.”

This charge against the estate is without date, and the printed record nowhere distinctly shows when the allowance was made, although the inference is justified that it was made sometime prior to the filing of the second account.

The exceptions were filed in the probate court July 19, 1901, and were heard and overruled by that court January 7, 1902, and the account approved. Thereupon the cause was appealed by the exceptors to the court of common pleas.

Long after the appeal was effected, to-wit, July 1, 1905, there was filed in the coúrt of common pleas by the administrator a motion setting out the allowance of the fifteen hundred dollars to him by the probate court as of June 28, 1901, but that no entry of such allowance was made on the journal of the probate court and asking an order of the common pleas nunc pro tunc • to require such entry as of the date named to be entered on the journal of the probate court. This motion was resisted by the exceptors, but the' motion was sustained and the order made and an entry of the character desired was placed on the journal of the probate court as of June 28, 1901.

At the trial of the case upon the exceptions in the court of common pleas, January 27, 1906, the plaintiff in error, the administrator, in support of the allowance- by the probate court, gave in evidence a duly attested copy of the said journal entry so made nunc pro tunc in the probate court by order of the common pleas, as of June 28, 1901, in substance showing that, on an application made by said administrator for extraordinary services in the settlement of the estate, from the time of his appointment to that date, in addition to such extra compensation as had been heretofore allowed, and as further part payment for such extraordinary services so rendered, the probate court allowed, for such extra services, the sum of fifteen hundred dollars and authorized and allowed the administrator to pay to himself out of the funds in his hands belonging to said estate the said sum of fifteen hundred dollars as further partial compensation for said extraordinary services.

No other testimony was offered by the administrator to support his claim for said fifteen hundred dollars for such extraordinary services,. but he rested his side of the case wholly on the said record of the probate court. It appeared by the cross-examination of the administrator that the application was a verbal one, not in writing, and that no notice was given to any creditor, or other person interested in the estate, of said application or said hearing, nor was any creditor, or other interested party, present or cognizant of said proceeding, but the same was wholly ex parte. No testimony was offered by the exceptors.

The court of common pleas thereupon found and held that the claimed allowance of fifteen hundred dollars so made by the probate court ■ is not conclusive upon the excepting creditors, or upon this court, and the same-being found by the court to be excessive is vacated and set aside, and the exception to said second account so far as it refers to the fifteen hundred dollar item is sustained. Thereupon judgment followed from which, as'before stated, the administrator prosecuted error to the circuit court, and failing there brings error in this court.

The record, athough somewhat involved, presents but a single question, viz.: was the allowance of fifteen hundred dollars by the probate court for claimed extraordinary services by the administrator conclusive as against parties interested in the estate, or could the creditors, by excepting to the settlement account of the administrator in which the charge against the estate appeared, have the same reviewed?

It is the .contention of plaintiff in error that there having been no attempt made to attack the allowance by direct proceedings instituted for that purpose, the said allowance and order of the probate court still standing upon that court’s journal unreversed and unmodified, the same is conclusive, and cannot be attacked by exceptions to the account, that being a mere collateral attack. This claim rests upon the further proposition that the allowance was a judicial act of a court having full jurisdiction to pass upon and make such allowance; that such application for allowance is an ex parte proceeding in rem of which no notice to creditors or others is necessary, and that the action of the court thereon does, and necessarily must, bind the whole world; and further, that a proceeding in rem cannot be rendered adversary except by express legislative act, and our statutes show no such change of the rule.

It is not doubted that the probate court has power, in the proper way and at the proper time, to make allowances for extraordinary services by an administrator, nor that, speaking in the general sense, the proceedings in the settlement of estates by the probate court are not inter partes, or adversary in character, but are proceedings in rem. This because the estate itself, the res, is committed to that court, and on that court is devolved the duty of determining its status and disposing of its' corpus. But it does not follow that every matter connected with the settlement of an estate is strictly in rem, and therefore binding on everybody without notice, for we find provision for notice in many matters which in their nature may be considered in rem. As observed by Okey, J., in Heck v. Heck, 34 Ohio St., 369: “While obviously many acts may be performed in the administration of the estate without notice (as in 5 Ohio, 200), others cannot be properly performed in the absence of it, though the statute be silent. Of the latter class are proceedings to appoint new appraisers, and the act of such appraisers in making allowance to a widow for a year’s support. True, the statute did not, in terms, require notice to the executor, much less notice in any prescribed form; but the executor represents the estate and in a sense the creditors, and upon the plainest principles of justice, he is entitled to notice of these proceedings.”

Whether or not the action in making the allowance taken by the probate court in this case should be regarded as in rem or adversary must therefore necessarily depend upon the proper construction of our statutes relating to the settlement of estates in the probate court taken in connection with the clause of the constitution, section 8, article IV, giving jurisdiction to that court. The constitutional provision relating to this subject is: “.The probate court shall have jurisdiction in probate and testamentary matters, the appointment of administrators and guardians, the settlement of the accounts ' of executors, administrators and guardians.” Statutory provisions are: By section 524, Revised Statutes, exclusive jurisdiction is given “to direct and control the conduct and to settle the accounts of executors and administrators, and to order the distribution of estates.” Section 6175 imposes the duty on an'administrator to render account of his administration at times as therein stated. B}r section 6006 every administrator is required before entering on the execution of his trust to give bond with condition among other things, to render upon oath a true account within eighteen months and at any other times when required by the court or the law, and failing so to do for thirty days after he shall have been notified of the expiration of the time by the probate judge he shall receive no allowance for services unless the court shall enter upon its journal that such delay was necessary and reasonable. The same provision as to allowance for services is found in section 5996 as applicable to executors. Section 6402 makes it the duty of the probate judge to cause notice for not less than three weeks of the filing of accounts by administrators, etc., to be published in some newspaper of the county, specifying the time when such accounts will be heard, and recognizing the right of interested parties to interpose exceptions. By section 6186 authority is given the court to refer the account and exceptions to a special master commissioner. Special provision is given by section- 6407 to appeal to the court of common pleas “from any order, decision or judgment of the probate court in settling the accounts of an executor, administrator,” and also in a large number of controversies growing out of the settlement of estates, “and the cause so appealed shall be tried, heard, and decided in the court of common pleas in the same manner as though the said court of common -pleas had original jurisdiction thereof.” Section 6187 provides for the opening up of an account by any one adversely interested within eight months where the account has been settled in his absence and without actual notice to him. Also that upon every settlement of an account former accounts may be opened to correct mistake or error therein save where the dispute had been previously heard and determined. And finally, the provision specifically made for compensation for extraordinary services, section 6188, affecting commissions and allowances provides: “Executors and administrators may be allowed the following commissions upon the amount of the personal estate collected and accounted for by them, and of the proceeds of the real estate sold under an order of court for the payment of debts, or under directions of the will, which shall be received in full compensation for all their ordinary services,” etc., * * * “and in all cases such further allowance shall be made as the court shall consider just and reasonable for actual and necessary expenses, and for any extraordinary services not required in the common course of his duty,” etc.

We are unable to agree with counsel that proceedings which grow out of jurisdiction in rem cannot be rendered adversary except by express legislative act, but are of opinion that statutes affecting jurisdiction must be tested as to their proper meaning by the ordinary rules of construction. What, taking all the provisions’ together, and applying them to the subject-matter, did the general assembly mean by the language of the provisions as enacted? At the threshold we find that the subject of the settlement of the accounts of administrators, etc., has been deemed of so much importance as to call for a special constitutional provision. Why? Because the matter relates to the proper and lawful devolution of vast amounts of property, and affects the rights and interests of a great many people, of widows, adult heirs, children, and creditors. To make this power effective there has been enacted, as the epitome hereinbefore given shows, laws specifically providing for its exercise, and surrounding it as we think, with safeguards intended to insure a fair hearing and due consideration of the rights of all parties interested. These various sections clearly imply that the specified compensation of the administrator is to be'ascertained by the court when he shall have exhibited to the court by a settlement account the amount of the personal estate which he has collected and thus accounts for, and the amount of compensation for extraordinary services not required in the common course of his duty to be determined by the court on a showing to be made when the account is passed upon. This feature of the administrator’s compensation relates to the settlement of his account as fully as any other and is just as essential to a full statement of his account with the estate as any other item in it. If the probate judge may properly allow a claim for extra services ex parte and in advance of settlement, no reason is apparent why he may not in like manner allow every other item which properly belongs in an account, and thus practically defeat the plain justice and purpose of the statute. But, beside this, when analyzed, the position of the administrator is in essence and spirit adversary to the estate. He .charges, as in this specific instance, the amount of the allowance to the estate. Then for the first time in the record of the probate court’s doings does the matter of extraordinary compensation make its appearance, and the very statement itself is adversary. “The estate to the administrator, debtor,” is the form used in the account. This attitude of the administrator is recognized by the provision for appeal by a trustee as given in section 6408. If the appeal is in the interest of the trust he may appeal without giving bond; if in his own interest he must give bond. Thomas, Admx., v. Moore, 52 Ohio St., 200; Layer, Guardian, v. Schaber, Admr., 57 Ohio St., 234; Biddle, Trustee, v. Phipps, 2 O. C. C., 61; Taylor v. McCullom, 5 W. L. B., 414; Kennedy v. Thompson, 3 O. C. C., 448.

It cannot benefit the administrator that he has theretofore obtained the approval of that item at the hands of the probate judge, a practice which is not to be commended. The statute makes it clear that in general it is through the process of accounting that the probate court is given authority to allow extraordinary compensation, and the fact that the statute defines the conditions under which extraordinary compensation may be allowed implies that that is the proper way. In legal effect the item in dispute in the present case is part of the settlement account, is subjected to the same right of review, and must stand or fall on review the same as any other item excepted to.

At the trial in the common pleas the item of extra allowance was like any other item of the account excepted to. Its correctness as a charge was to be tried the same as though that court had had original jurisdiction of the case. The burden, therefore, was on the claimant to show that the services rendered by him were such as the law permits an extra allowance for, and to offer evidence to enable the court to properly fix the amount. He did neither. He was content to rest upon the action of the probate court. But, as we have held, that action was open to review and was then the very subject of review. It is not necessary to here consider the effect of an allowance to an administrator for extraordinary services made in a proceeding to sell land by order of court; nor a case where a written motion for allowance had been filed in the probate court and notice given to all interested parties, for we have no such case before us.

It follows we think clearly that tne attack in this case upon the action of the probate court was not a collateral, but a direct attack, and the court of common pleas was entirely justified in so treating it and in rendering judgment accordingly.

Judgment affirmed.

Price, C. J., Shauck, Crew, Summers and Davis, JJ., concur.