Opinion
October 4, 1965. —
December 1, 1965.
APPEAL from a judgment of the county court of Milwaukee county: RUDOLPH J. MUDROCH, Judge. Affirmed.
For the appellant there were briefs by Quarles, Herriott Clemons of Milwaukee, and oral argument by Maxwell H. Herriott.
For the respondent Alma Hoffman there was a brief by L. A. Willenson of Milwaukee.
For the respondent Fidelity Deposit Company of Maryland there was a brief by John Meyer of Milwaukee, and oral argument by Walter John.
Arthur W. Wettig died November 5, 1961, a resident of Milwaukee county. He left no will. Christine Thorp, an aunt, survived him, and was his sole heir and next of kin. Nineteen first cousins also survived. His net estate amounted to $30,244.81, all in personal property.
Alma Hoffman, one of the cousins, was appointed administratrix. On April 6, 1962, a document signed by Christine Thorp, dated March 4, 1962, and entitled "Release" was filed. The first paragraph read as follows:
"I, Christine Thorp, do hereby release any and all interest which I have in the estate of Arthur W. Wettig, except a one-fifth (1/5) share thereof. Out of that one-fifth (1/5) share there shall go $1500.00 to the Lutheran Home for the Aged and $1000.00 shall go to the Catholic Home for the Aged, both located at Milwaukee, Wisconsin, and the balance to La Verne Huberty. The check to the Lutheran Home shall be in the name of Arthur Wettig."
La Verne Huberty was a daughter of one of the 19 cousins. The second paragraph of the release was a list of the 19 cousins, and asserted that each was related to deceased in the same degree and entitled to an equal share in the part of the estate being released.
On December 13, 1962, Alma Hoffman filed proof of heirship, her final account, and a petition for allowance of the final account, determination of inheritance tax, and assignment of the residue. Each of the cousins other than Mrs. Hoffman gave written waiver of notice and consent to the granting of the petition. A written waiver and consent signed by La Verne Huberty and Christine Thorp was also filed. A hearing was held on that day. No notice of the hearing had been given to Lutheran Home for the Aged or Catholic Home for the Aged. Neither of them appeared, nor did they waive notice.
After the hearing and on January 2, 1963, the court entered an order in the usual form determining the amount of inheritance tax. In that order the court determined that out of one fifth of the net estate La Verne Huberty was entitled to $3,548.96, Lutheran Home for the Aged to $1,500, Catholic Home for the Aged to $1,000, and that out of the remaining four fifths, each cousin was entitled to 1/19 or $1,273.46. No judgment assigning the residue was entered in the usual form.
On January 4, 1963, the attorney for the administratrix mailed out a check to each distributee for the amount listed on the order determining inheritance tax, less the amount of the tax. Upon receipt of a check for $1,000, the officers of the Milwaukee Catholic Home for the Aged investigated in order to learn what interest the Home might have in the estate of Arthur Wettig. On such inquiry, they learned for the first time that Christine Thorp who resided in the Home was the heir and next of kin of Wettig.
On May 6, 1963, Milwaukee Catholic Home for the Aged filed a petition alleging that Christine Thorp had, on December 27, 1957, become a permanent resident of the Home and had executed an assignment to the Home of all property then or thereafter owned. The Home sought an order setting aside the release and assignment dated March 4, 1962, and assigning the residue of the estate to the Home.
Christine Thorp died May 7, 1963, still a resident of the Home. No petition has been filed for probate of her estate.
After hearing on the petition of the Home, and on a supplemental final account of the administratrix, showing the distribution of the estate, and the Home's objection thereto, the court made findings of fact, including, in substance, the following:
The proof does not establish that the failure of Mrs. Hoffman to give notice to the Home was deliberate and designed to prevent the Home from learning the fact that Christine Thorp had an interest in the Wettig estate. Mrs. Hoffman had no knowledge of the existence of the assignment executed by Mrs. Thorp December 27, 1957, at the time Mrs. Hoffman distributed the residue of the estate.
It also was shown at the hearing that on November 22, 1961, Mrs. Thorp had signed an assignment of her entire interest in the estate, one fifth to La Verne Huberty, and four ninety-fifths to each of the 19 cousins. This assignment was delivered to the attorney for the administratrix, but was never filed. Some time later Mrs. Thorp wrote the attorney stating that she desired to change the arrangement if not too late. As a result of this letter, and further conversation the release, dated March 4, 1962, was executed.
The assignment executed by Mrs. Thorp to the Home on December 27, 1957, recited, as consideration, her admission to the Home on a permanent basis, and, after transfering all interests in real estate then owned or thereafter acquired (expressly including inheritance) provided, with respect to personal property as follows:
"And also for the consideration above mentioned, I do hereby sell, assign, transfer and set over to said Grantee, all notes, mortgages, securities, debts, demands, claims, obligations, checks, certificates of deposit, pensions, life insurance and any and all other personal property of every kind and description whatsoever which I do now or may hereafter own, receive or become entitled to. And I do covenant and agree to execute and deliver to said Grantee from time to time such further deeds, assignments or instruments in writing as may be deemed necessary fully to carry out the intention of this instrument."
Judgment was entered November 20, 1964, determining that the duty of the administratrix to distribute the estate had been performed to the extent of the distributions made; that the fact the distributions were made before entry of a judgment does not impair the validity of the discharge of duty; that the final account and supplemental final account are allowed; that upon filing by the administratrix of a receipt of the Home for $1,000 and of a receipt by her for $2.38, the administratrix be discharged; and that the petition of Milwaukee Catholic Home for the Aged be dismissed as to Alma Hoffman as administratrix and her surety as such, but without prejudice to the right of the Home, if any, to enforce the assignment of December 27, 1957, against the distributees in any separate or independent action.
The Home has appealed from the judgment. Further facts will be referred to in the opinion.
In substance, the judgment appealed from assigned the estate according to the record as it stood at the time of the December, 1962, hearing and at the time distribution was made; and declined to enforce the Home's claim under the 1957 "assignment" because the assets were no longer in the possession of the administratrix and she had distributed them without notice of the Home's claim. Determination of the Home's rights, if any, to the assets was left to such actions as the Home might bring against the distributees.
The Home considers that the document executed by Mrs. Thorp in 1957 is an assignment of her interest in the Wettig estate. The Home then contends that since its "assignment" was filed with the court before entry of final judgment, sec. 318.06(10), Stats., compels the court to determine the validity of the "assignment" and assign the estate to the Home by final judgment, accordingly.
Counsel points to the general rule that an executor or administrator who distributes personal property prior to judgment does so at his own risk. If the 1957 document were an assignment of Mrs. Thorp's interest in the Wettig estate, it would follow, as the Home argues, that the fact that Mrs. Hoffman had already distributed the assets would be immaterial. As long as the assignment be presented before judgment, the judgment must reflect it if valid.
Williams v. Ely (1860), 13 Wis. 1, 10 (*1, *9), and Will of Grover (1928), 197 Wis. 347, 222 N.W. 228.
The difficulty lies in the peculiar character of the 1957 document insofar as it relates to an expectancy of inheritance from one not yet deceased. Such an "assignment," in Wisconsin, is only an agreement to assign an interest in an estate after that interest has come into existence by the death of the testator or intestate. The agreement is enforceable in equity if supported by adequate and fair consideration and if enforcement is otherwise not inequitable.
Hofmeister v. Hunter (1939), 230 Wis. 81, 88, 283 N.W. 330. See also Estate of Jacobus (1934), 214 Wis. 143, 252 N.W. 583.
The following memorandum was filed February 1, 1966:
It would follow that the Home could have brought an action against Mrs. Thorp after Wettig's death to compel her to assign her interest in the estate, if the court deemed enforcement not inequitable. We have no doubt that if the Home had asserted its claim in the probate proceeding while the assets were still in the hands of the administratrix, the county court could properly have entertained the claim in that proceeding. Although in an era of greater emphasis upon technical distinctions, a probate court might have relegated the Home under any circumstances to an independent action in equity to compel enforcement, that would be out of harmony with modern emphasis on substance rather than form. But in any event, the controlling principles are equitable.
Thus in the instant case, the court properly applied equitable principles. The delay in the presentation of the Home's petition was no more chargeable to the administratrix than it was to the Home. She had made distribution of the assets in good faith. Although the judgment assigning the estate had not been entered, a hearing had been had, and the court in determining the inheritance tax had adjudicated the distributive shares on the basis of the 1962 assignment and renunciation, as was proper in the state of the record at that time. Although no notice of hearing had been given the Home, the only basis on record for recognizing any interest of the Home was the assignment to it of $1,000, and it was proposed to pay that in full.
Assuming the adequacy of the consideration for the 1957 "assignment," and there seems to be no claim to the contrary, one of two innocent parties must bear a burden. Under the county court's decision, the Home must bring action against the distributees in order to enforce the agreement. If the decision had gone in favor of the Home, the administratrix and her surety would be immediately liable to the Home, and would have to look to the distributees for recoupment.
We consider the choice made by the county court was within the discretion of a court of equity.
By the Court. — Judgment affirmed.
HALLOWS, J., took no part.
The Milwaukee Catholic Home for the Aged urges that the mandate be modified so that the probate branch of the county court would retain jurisdiction and determine the claim of the Catholic Home against the several distributees in this action.
The Catholic Home relies upon sec. 318.06(2) and (10), Stats., and urges that the county court's probate jurisdiction is broad enough under such section, as well as under sec. 253.10, to permit an adjudication of the controversy in the county court between the Catholic Home and the distributees.
While the county court would clearly have had jurisdiction to adjudicate the issue before the distribution had been made, we believe that it would be inappropriate for the county court to retain jurisdiction and in this action attempt to follow the assets into the hands of the distributees; this is particularly true if some of the distributees were served by publication rather than in person.
We recognize that it is less convenient for the appellant to be obliged to pursue its remedy in separate civil proceedings against the individual distributees, but we deem such course necessary upon the facts of this case.
The motion for rehearing is denied, without costs.