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In re Franz's Estate

Supreme Court of Missouri, Division No. 1
Oct 8, 1951
242 S.W.2d 490 (Mo. 1951)

Opinion

Nos. 42004, 42003.

September 10, 1951. Rehearing Denied October 8, 1951.

APPEAL FROM THE CIRCUIT COURT OF THE CITY OF ST. LOUIS, EDWARD M. RUDDY, J.

J. Hugo Grimm, University City, Oscar E. Buder, St. Louis (Elmer H. Grimm, St. Louis, of counsel), for appellant.

Jacob M. Lashly, Paul B. Rava and Lashly, Lashly Miller, all of St. Louis, for respondent:


This record covers two appeals from judgments overruling exceptions filed to settlements in the matter of the estate of Walter G. Franz, deceased, and in the matter of the estate of Ernst H. Franz deceased. The appeals have been separately briefed.

Walter G. Franz died testate August 12, 1922, a resident of Cincinnati, Ohio, and William P. Fosdick and John J. Rowe were duly appointed executors under his will. On January 22, 1924, the Mississippi Valley Trust Company (hereinafter referred to as administrator or Trust Company) was appointed ancillary administrator c. t. a. of the estate of Walter G. Franz, deceased, by the Probate Court of the City of St. Louis.

In the eleventh settlement filed by the administrator on October 21, 1933, the administrator took credit for administrator's commissions in the sum of $2400.00 and, in the final settlement filed April 2, 1941, took credit for the balance of the administrator's commissions in the sum of $25,244.84, figured at the statutory rate under Sec. 220 R.S. 1939, R.S.Mo. 1949, § 465.100.

Thereafter, appellants filed certain exceptions to said settlement. On October 14, 1942, all exceptions were certified to the circuit court of the City of St. Louis on the ground that the probate judge was a material witness. Thereafter, on October 14, 1943, during the trial of the exceptions, appellants were permitted to amend their exceptions and to add the exception in question here, to-wit, that the total credit taken by the administrator for commissions in the sum of $27,644.84 was excessive and improper "because said administrator agreed with the Domiciliary Executors that its commission shall not exceed $15,000." All of the exceptions to the settlement in this estate were heard by the trial court along with all of the exceptions filed in the matter of the estate of Ernst H. Franz, deceased, and the cause was submitted to the court.

The record shows that, after the cause was submitted, many matters intervened to delay a decision, including the long illness of the reporter who took and later transcribed the testimony.

On December 12, 1949, the trial court found that "no agreement was ever entered into that the commission of the trust company, as ancillary administrator, should not exceed $15,000.00"; and that the exceptions based upon "the ground that the administrator had a binding agreement to take a commission of $15,000.00 in this estate" was "not supported by evidence." The exceptions were overruled.

The single issue presented on this appeal is whether or not there was a legal and binding agreement between the administrator and the domiciliary executors that the administrator's commissions should not exceed $15,000. If no such agreement was made, the judgment must be affirmed.

The single assignment under points and authorities in appellants' brief is that, "It was perfectly legal for the * * * administrator in the instant case to agree to accept as its compensation commissions not exceeding $15,000 as long as such agreement was not fraught or tainted with trafficking in public office." We do not reach that question because, on the record presented and reviewed, we have reached the conclusion that no such agreement, as alleged, was ever made.

The record contains much documentary evidence, including letters, telegrams and office memoranda, beginning in 1923 and extending to October 17, 1935, together with the oral testimony of participants in the various conferences and others directly connected with the matter in issue. Appellants in their printed statement and argument rely almost entirely upon the documentary evidence presented, but suggest no specific date as to when any such agreement was reached. We shall briefly review some of the evidence relied upon by the respective parties.

On December 29, 1923, the Trust Company wrote to Messrs. Rowe and Fosdick, Executors, that "if this company should be appointed ancillary administrator of the estate of Walter Franz * * * upon any properties coming into its hands, the usual compensation, fixed by statute, would apply." On January 3, 1924, Messrs. Rowe and Fosdick replied stating their desire that an ancillary administrator be appointed, and that the Trust Company act as such, "assuming of course that a satisfactory agreement can be reached as to commissions and our right * * * to direct * * * in respect to litigation." On January 16, 1924, the Trust Company replied, "it is and has long been our settled practice not to accept less than the statutory commissions * * * we can not deviate from that practice now." On the same date the Trust Company's attorney (Mr. Roudebush) wrote Messrs. Rowe and Fosdick to the same effect. The appointment was, thereafter, made upon the petition of the domiciliary executors, Messrs. Rowe and Fosdick, on January 22, 1924, as stated.

On July 16, 1930, the administrator's attorney (Roudebush) made a memorandum of a conference had with other attorneys for the purpose of considering a compromise settlement of pending litigation to oust the ancillary administrator. The conference "necessitated (an) attempt to reach an agreement as to our fees and attorney fees." A proposition of $15,000 was submitted, "this proposal having been agreed upon in conference of all the officers of the Trust Department." The amount was considered unreasonable by the executors' attorney (Hollister) but he agreed "he would take the matter up with his clients." Thereafter followed discussion of attorney fees for Mr. T. M. Pierce (an attorney for the administrator associated with S. H. Liberman) and it was suggested that the fee should be 15 to 20 percent with one-half to counsel for the executors. Mr. Hollister said he would have difficulty in maintaining the amount with the executors and "his court."

On May 11, 1931, Mr. Hollister wrote Mr. Pierce that he had "secured the approval of the executors to the tentative arrangement * * * made * * * in connection with the settlement of fees and commissions in the Franz matter." The several items of the tentative agreement were listed, including $15,000 to the administrator, the items being set out for the alleged purpose of submission to "the Franz representatives" in an effort to settle with them. Reference is made to settlement, if all parties agree, and to possible objections which might completely invalidate the whole settlement. Other correspondence followed which dealt with efforts to make compromises and reach tentative agreements on the other matters involved.

On June 9, 1931, the executors' attorney (Hollister) wrote the administrators' attorney (Pierce) inquiring as to whether he had discussed with another attorney (Roudebush) "the draft of the fee and commission agreement" he had submitted for approval and execution. A reply was sent on June 11, 1931, which, after reference to other matters interfering with the settlement, said that "when you and I got together on fees all obstacles were practically removed for an amicable adjustment, in so far as we are concerned, because surely your people and the Mississippi Valley Trust Company are not going to have any desperate argument over the division of commissions, * * *." On June 26, 1931, Mr. Hollister wrote Mr. Liberman (attorney for the administrator) "I hope you will be able to take up soon with Mr. Roudebush the question of the fee and commission agreement."

On July 3, 1931, Mr. Liberman wrote Mr. Roudebush (both attorneys for the administrator) as follows: "My understanding is that the Trust Company agreed to accept a compensation of $15,000.00 as commission on the estate of Walter G. Franz. The agreement, as drawn by Mr. Hollister, permits of a reduction of this amount, as you will note from an examination of same, * * *." This form for the proposed written agreement, as submitted by the attorney for executors in June 1931, was for a four party contract involving the executors, the administrator, Mr. Pierce and Mr. Hollister. One item in this proposed contract would have fixed the administrator's fee at $15,000. The proposed contract was never signed by any one.

On August 31, 1931, Mr. Hollister, the executors' attorney, wrote Mr. Liberman, as follows: "I am in hopes now that Mr. Pierce has returned that we can get down in writing our informal agreement on fees and commissions. I think it would be wise to have it in this shape if possible, and of course I am still in hopes that the whole thing may be mutually accepted by the other side with a view toward terminating all litigation as early as possible." On September 29, 1931, Mr. Hollister wrote Mr. Pierce, "Can we not make some progress on the agreement as to fees and commissions?"

On October 12, 1932 Mr. Pierce wrote Mr. Hollister a long letter with reference to pending litigation and in the letter stated: "I took up with Mr. Roudebush the matter of the compensation of the Mississippi Valley Trust Company and he stated that the charge which the Mississippi Valley Trust Company would make for its services would be $15,000.00. * * * I have carefully considered the matter of our attorney fees and have arrived at the conclusion that a fee of twenty per cent on the value of the assets coming into the hands of the Administrator is a fair and reasonable one and of this amount, pursuant to our understanding, you would receive one-third. * * * if you agree with me please let me know when you are coming so I can arrange to be in St. Louis at the time."

On January 9, 1933, Mr. Rowe wrote Mr. Roudebush, "We feel that a full agreement as to fees in imperative, so that we could join in the request for allowance in Missouri, and our request to the Probate Court here be backed up with some evidence of concurrence in Missouri. We understood that you were to take up with your people the question of your final fee with a probable reduction, and I am writing to ask for your decision, or your views, so that we may reach a full decision as to ours." On January 13, 1933, Mr. Rowe wrote Mr. Roudebush, "We would much appreciate it if we could straighten out the question of fees by correspondence, if possible." On February 11, 1933, Roudebush wrote Messrs. Rowe and Fosdick "* * * we would be willing to accept $12,500 as commission for our services as administrator, provided the estate is promptly closed and the commissions thereupon paid." On February 7, 1933 Mr. Roudebush wrote Mr. Rowe, "I submit on the contrary that for you to insist that because we once offered (in the effort to effect a settlement) to accept less than one-third of the commissions to which we would have then been entitled to statute we should now make still further reductions is hardly just. That would be to penalize one for generosity." Much other correspondence followed.

On October 17, 1935 Mr. Roudebush wrote in a memorandum that he had advised a Mr. Fiske "that we would so much welcome a settlement of all controversies that I would certainly recommend to our Trust Estates Committee our accepting $15,000 as commissions on the Walter Franz estate, and that I believe that the Committee would accept that recommendation."

On December 26, 1934, the administrator had, in a supplemental final settlement filed on that date in the matter of the estate of Ernst H. Franz, deceased, accepted $15,000 as commission in lieu of statutory commissions.

It will not be necessary to review the evidence further. Enough has been set out to show whether the parties themselves considered that a contractual relationship existed as to the several items upon which they were trying to reach an agreement.

"In order that there may be a contract, it is necessary that there be a meeting of the minds of the contracting parties." Rexford v. Philippi, 337 Mo. 389, 84 S.W.2d 628, 631. "In order that there may be an agreement, the parties must have a distinct intention common to both and without doubt or difference. Until all understand alike, there can be no assent, and therefore, no contract. Both parties must assent to the same thing in the same sense, and their minds must meet as to all the terms. If any portion of the proposed terms is not settled, or no mode is agreed on by which it may be settled, there is no agreement, * * *." 17 C.J.S., Contracts, § 31, p. 359; Dobbins v. City Bond Mortgage Co., 343 Mo. 1001, 124 S.W.2d 1111, 1116; Huttig v. Brennan, 328 Mo. 471, 41 S.W.2d 1054, 1062. "A contract is not made so long as, in the contemplation of both parties thereto, something remains to be done to establish contract relations. The law does not make a contract when the parties intend none, nor does it regard an arrangement as completed which the parties thereto regard as incomplete." 12 Am.Jur. p. 519, Sec. 23.

From a careful reading and study of the whole record we think it is very clear that there was never a meeting of the minds of the parties. No present binding agreement was ever intended. The subject matter under consideration for the proposed contract involved a number of items, both fees and commissions, and the divisions thereof to be made. While at times the parties tentatively agreed upon particular items to be included in the proposed contract, they intended that the contract cover other items and they intended to subsequently reduce the contract to writing and to have it signed by all of the parties in interest. No "piece-meal contract" was ever intended or agreed upon. No tentative agreement on all of the several items was ever reached and no contract was intended until a complete agreement was reached, reduced to writing and signed. Priest v. Oehler, 328 Mo. 590, 41 S.W.2d 783, 786; 12 Am.Jur. 522, Contracts, Sec. 25. The conferences between the several attorneys were always subject to the approval of their clients and no contractual relationship was ever intended or consummated by the meeting of the minds of the parties upon all of the several matters which the parties at all times intended to reach an agreement upon before any contractual relationship was established.

No contract, as alleged, being shown by the evidence, the judgment overruling the exceptions in the Walter G. Franz estate is affirmed.

Ernst H. Franz died testate March 7, 1922, a resident of Los Angeles, California, and the Security-First National Bank of Los Angeles was appointed executor and trustee under his will. On January 22, 1924, the Mississippi Valley Trust Company was appointed ancillary administrator c. t. a. of the estate of Ernst H. Franz, deceased, by the Probate Court of the City of St. Louis.

Thereafter, the administrator employed Thomas M. Pierce and Samuel H. Liberman, attorneys to represent it in certain pending litigation. They entered their appearance in said litigation on behalf of the administrator on November 3, 1924. On the 19th day of April, 1932 the administrator paid these attorneys $12,000 on account of legal services rendered. On October 20, 1932, Mr. Pierce proposed that he and his associate be paid a fee of 20 per cent of the amount which he insisted they had recovered for the estate, or, upon their calculation of values, a fee of $120,000. The claim was contested. After an extended controversy as to what further amount would constitute a reasonable fee for the services rendered, disposition was finally made. On October 8, 1934, the administrator paid Pierce and Liberman an additional balance of $48,000 in full settlement for their services. Thereafter, on October 12, 1934, the administrator filed its final settlement in said estate and took credit for this $48,000 so paid to Pierce and Liberman. On October 17, 1934, appellants filed objections to this final settlement. On December 27, 1934, an amended supplemental final settlement was filed and on July 3, 1935, appellants filed amended exceptions to the final settlement of October 12, 1934. Appellants excepted to the credit appearing in the final settlement on account of the alleged payment of a $48,000 balance to T. M. Pierce and Samuel H. Liberman for legal services. The further history of these exceptions is fully set out in this court's opinion. In re Franz Estate, 346 Mo. 1149, 145 S.W.2d 400. The court held that the attorneys were entitled to receive a fee of $20,000, that is, $8,000 in addition to the $12,000 theretofore paid; and that the administrator was entitled to a credit of only $8,000 in lieu of the credit of $48,000 shown in the settlement and approved by the circuit court.

On February 11, 1941, after the mandate of this court reached the circuit court of the City of St. Louis, that court entered its order and judgment that the exceptions be sustained to the extent that "in lieu of said credit for Forty Eight Thousand Dollars the said administrator be and hereby is allowed a credit for Eight Thousand Dollars." All other exceptions to the final settlement were overruled. Thereafter, on April 2, 1941, the administrator filed a Second Supplemental Final Settlement charging itself as follows: "Feb. 20, 1941, Amount of credit taken in final settlement, on account of fee to Thomas M. Pierce and Samuel H. Liberman, disallowed by final judgment (credit claimed in final settlement $48,000.00 — credit allowed by final judgment $8,000.00 * * * $40,000.00."

On April 4, 1941, appellants filed their exceptions to said second supplemental final settlement on the ground that the administrator had failed to charge itself with interest from October 8, 1934 until February 20, 1941 on said sum of $40,000 for which it had taken credit. Respondent thereupon pleaded the former judgment in bar, to-wit, "that the amount of surcharge as to this item has been finally and conclusively litigated and determined." Thereafter, the cause was certified to the circuit court on the ground that the probate judge was a material witness. The cause was tried with other exceptions, as hereinbefore stated.

Appellants' evidence tended to show that the administrator, prior to its settlement of the claim of Pierce and Liberman for additional attorney fees, entered into a written agreement with said attorneys whereby it secured itself against loss in the event that the court should not allow the credit. By this agreement, dated October 2, 1934, the Trust Company agreed to pay Pierce and Liberman a balance of $48,000 in full satisfaction of their claim for attorneys' fees. Pierce and Liberman acknowledged receipt of the total sum of $60,000 in full discharge of their claim. Pierce and Liberman further agreed to buy and deposit with the Trust Company two certificates of deposit aggregating $48,000 as security, in the event said payment of the balance of $48,000 of attorneys' fees should be finally disallowed by the courts, and they agreed that in such event "to promptly repay" to the Trust Company "any amount of said payment which shall be finally disallowed by the courts, together with interest thereon from the date of said payment." Thereafter, the administrator executed and delivered to Pierce and Liberman a check for $48,000, dated October 8, 1934. The check was endorsed by them in blank and presented for payment and was paid on the same date. With the proceeds of the check Pierce and Liberman purchased two certificates of deposit totaling $48,000. These certificates of deposit did not bear interest and were payable to the Trust Company and were deposited with the Trust Company in accordance with the terms of the agreement. On March 28, 1941, Pierce and Liberman made a further deposit of $7,313.33 as an "additional amount to be held as a reserve for interest." The certificates of deposit were cashed on February 21, 1941, the $40,000 was returned to the administrator and $8,000 credited to Pierce and Liberman's escrow account. This account was closed June 5, 1941.

On December 12, 1949, the trial court found that, when the $48,000 was paid by the administrator to the attorneys, the payment of the claim was intended; that, since payment was made, the money no longer belonged to the estate, but to the attorneys; that the payment was made in good faith and the administrator could not be charged with interest thereon although the payment was subsequently disallowed; that the judgment entered on the prior appeal barred any charge of interest on the disallowed payment; that the claim for interest could have been presented in the prior exceptions; and that the final judgment, as entered after the prior appeal, established the balance due from the administrator in connection with the attorneys' fee payment, to-wit, $40,000 without interest. The court thereupon, entered its judgment overruling the exceptions.

Appellant assigns error on the holding that the administrator is not liable to the beneficiaries for interest on the sum of $40,000 paid by it to Pierce and Liberman. Under points and authorities appellants contend that an administrator is the representative of the creditors, legatees and distributees of an estate and occupies a trust relationship in the broadest sense; that the payment of the $40,000 was unauthorized, wrongful and amounted to a conversion; that, since the acts of the administrator were a conversion, it must be charged with interest at the legal rate; that the administrator mingled the $40,000 with its own funds and is, therefore, liable for interest; that the court must charge the administrator with interest even in the absence of any exceptions; and that the court on its own motion should charge the administrator with interest. Certain other points urged have been excluded by a stipulation of the parties and need not be considered.

In view of the conclusions we have reached it will not be necessary to separately consider these assignments. Appellants' exceptions are barred by the prior judgment, since the issue as to interest could have been, but was not, raised by appellants on their prior exceptions to the final settlement filed on October 12, 1934. The judgment approving that settlement has become final, as to them, except for the change mentioned.

Appellants in their reply brief say that they raised the question of interest in their prior exceptions to the final settlement, apparently because of the reference to the agreement of October 2, 1934. Appellants further insist that the matter of the administrator's liability for interest was not decided by this court on the prior appeal; and that the court "could not anticipate that the Trust Company would fail or refuse to change itself with interest."

In the prior exceptions to the final settlement the appellants contended that the $12,000 payment to the attorneys more than compensated them for all legal services rendered; that part of said payment should be charged against the administrator; and that the administrator was entitled to no credit for the alleged payment of $48,000 to Pierce and Liberman. No question of charging the administrator interest on the alleged payment was raised or suggested. The final settlement of the administrator was ultimately approved, except as to the one issue, to-wit, "that in lieu of said credit of Forty Eight Thousand Dollars the said administrator be and hereby is allowed a credit of Eight Thousand Dollars." As stated, appellants have now excepted to the supplemental final settlement because of the administrator's failure to charge itself with interest at the legal rate on the $40,000 from October 8, 1934, "until February 20, 1941, and thereafter until said $40,000 and interest are paid over to these exceptors."

If the payment of said $40,000 "was unauthorized and wrongful and amounted to a conversion," as now contended, and, if the administrator is liable to be charged with interest on said amount from October 8, 1934 on any theory, such liability for interest existed prior to the date of the final settlement of October 12, 1934 and prior to the exceptions of October 17, 1934, and the amended exceptions of July 13, 1935. Liability, if any, for the payment of interest by the administrator arose out of and was a part of the transaction upon which appellants sought to exclude the credit taken for the alleged $48,000 payment of attorney fees and was a part of the same cause. When the prior exceptions were filed, the administrator was not charged in its final settlement with any interest on the amount paid to its attorney, but, on appellants' theory, interest was then due the estate from the date of the alleged conversion and unauthorized payment. Appellants based no exceptions on that ground. No question as to interest on the alleged overpayment was then presented. On February 11, 1941, the final settlement was approved, except as stated. That judgment was final and conclusive on the parties, not only as the exceptions filed to the final settlement, but to those that might or could have been filed thereto. A judgment is final and conclusive not only on issues raised, but "as to points that might have been raised but were not." Boatmen's National Bank of St. Louis v. Bolles, 356 Mo. 489, 202 S.W.2d 53, 58; Cordia v. Matthes, 344 Mo. 1059, 130 S.W.2d 597; Spratt v. Early, 199 Mo. 491, 500, 97 S.W. 925; Crowell v. Styler, 314 Mass. 122, 49 N.E.2d 599, 601; In re Irvine's Estate, 209 Pa. 325, 58 A. 618; In re Vidrine's Estate, 178 La. 413, 151 So. 637; In re Lanier's Estate, 196 Misc. 96, 88 N.Y.S. 2d 517, 527; In re Schwartz's Estate, 286 Ill.App. 310, 3 N.E.2d 289, 290. The present exceptions are barred by that judgment.

The judgment overruling the exceptions is affirmed.

All concur.


Summaries of

In re Franz's Estate

Supreme Court of Missouri, Division No. 1
Oct 8, 1951
242 S.W.2d 490 (Mo. 1951)
Case details for

In re Franz's Estate

Case Details

Full title:IN RE FRANZ'S ESTATE. MISSISSIPPI VALLEY TRUST CO. v. BEATTY ET AL…

Court:Supreme Court of Missouri, Division No. 1

Date published: Oct 8, 1951

Citations

242 S.W.2d 490 (Mo. 1951)

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