October 5, 1962 —
October 30, 1962.
APPEAL from an order of the county court of Milwaukee county: ROY R. STAUFF, Judge. Affirmed.
For the appellant there was a brief and oral argument by Martin J. Torphy and Ellis R. Herbon, both of Milwaukee.
For the respondents there was a brief by Grootemaat, Cook Franke, attorneys, and Thomas J. Drought and Robert E. Cook of counsel, all of Milwaukee, and oral argument by Mr. Drought.
The county court declined to appoint the executor named in the will of Paul Keske, deceased. Elmer Keske, Paul's son, and the executor so named, has appealed from the order entered January 31, 1962, appointing an administrator with the will annexed.
The county court found that during Paul's lifetime his general guardian commenced an action against Elmer to set aside a deed allegedly procured by undue influence and to collect for the use and occupancy of the land conveyed; that the action was pending at Paul's death and was in the process of revival before the circuit court. The county court concluded that because of the circuit court action, Elmer was not legally competent.
The time limited for presenting claims had expired and it was established that the personal property which would come into the hands of the executor would be sufficient to pay all claims and expenses of administration. There were no legacies other than a general devise and bequest of all of Paul's property to his heirs in equal shares. The will was dated December 13, 1946.
The county court took notice of the record in the circuit court action disclosing facts as follows:
On April 10, 1959, Paul Keske executed a deed of certain real estate to Elmer Keske and his wife. On June 23, 1959, the county court found that Paul was incompetent because of mental illness and appointed a guardian. In October, 1959, the guardian brought action in circuit court against Elmer and his wife to compel reconveyance of the property or cancellation of the deed and to determine a reasonable amount for use and occupancy of the premises from the time the deed was executed.
The guardian alleged that the land conveyed was worth $100,000 and that the value of use and occupancy was not less than $200 per month; that the consideration for the purchase was a down payment of some $4,300 and a note and mortgage for $15,000; that Paul was incompetent when the deed was executed and that Elmer and his wife obtained the deed by the use of undue influence. Plaintiff deposited the amount of the down payment and the note and satisfaction of the mortgage with the clerk of circuit court for delivery to Elmer and his wife, a previous tender having been made and refused. Plaintiff asked that the amount allowed for use and occupancy be deducted from the amount deposited. Defendants denied the allegations of incompetency at the time of conveyance and undue influence; and denied the allegations as to the value of the property and of its use.
Paul Keske died July 29, 1961, shortly before the action was scheduled for trial. In December, 1961, defendants moved for dismissal of the action by reason of Paul's death. Pursuant to sec. 269.24, Stats., and upon notice to plaintiff guardian and all the heirs, the circuit court on December 21, 1961, entered an order that the action be dismissed except that the heirs and the executor or other personal representative have forty days from the service of the order in which to revive or continue the action by proceedings under sec. 269.23.
Elmer had caused proceedings for the probate of the will to be commenced August 3, 1961, but his petition had not been brought on for hearing until January, 1962. By this time the other heirs had filed their objection to his appointment as executor. The will was admitted January 15th but no personal representative appointed at that time.
The questions are: (1) Did the personal representative of Paul Keske, deceased, have any duty to perform with respect to the circuit court action? (2) Was Elmer properly considered legally incompetent to be the personal representative because of inability to perform such duty?
1. Duty of personal representative. Elmer argues that the personal representative of a deceased has no interest in an action for rescission or cancellation of a conveyance of land made by the deceased unless there is a deficiency of assets to pay creditors of the estate, expenses of administration, or (under some circumstances) legacies. This court has held that unless there be such deficiency the administrator is not entitled to institute an action to set aside a conveyance of real estate made by a decedent as a result of fraud practiced upon him. Because real estate descends to the heirs or devolves upon devisees immediately upon the death of the ancestor or testator, the right of action descends to them and they have the right to prosecute and control the action.
Neeten v. Holzhauer (1927), 193 Wis. 196, 201, 214 N.W. 497; Glojek v. Glojek (1948), 254 Wis. 109, 35 N.W.2d 203. See, however, Zartner v. Holzhauer (1931), 204 Wis. 18, 234 N.W. 508.
This court does not appear to have considered a situation like the one now before us where an action for cancellation had been instituted before the death and recovery also sought for the use of the premises. Neither has it considered a situation where the heirs or devisees have instituted an action to set aside a conveyance and the personal representative desires to be a party to the action in order to recover the value of the use of the property before the death. In Neelen v. Holzhauer, supra, the parties argued whether or not the existence of a cause of action for rents and profits between the time of conveyance and the death would justify the commencement of an action by the administrator alone to cancel the conveyance, but the opinion contains no discussion of the point.
1614 Cases and Briefs, Neelen v. Holzhauer, respondent's supplemental brief, p. 5, and appellant's reply brief, p. 2.
In the instant case the action for cancellation and recovery of an allowance for use was commenced before the death. An equitable action to set aside the conveyance of real estate survives. An allowance for the use of the land would appear to be a proper incident of the action. The relief obtainable includes "a complete adjustment of the respective equities of those concerned." Such allowance for the use of the land up to the time of the death would be an asset of the estate.
Sec. 331.01, Stats.
See 9 Am. Jur., Cancellation of Instruments, pp. 402, 403, secs. 65, 66.
The personal representative, not the heirs, is entitled to sue for rents accruing before the death of a landlord. 21 Am. Jur., Executors and Administrators, p. 885, sec. 915; p. 944, sec. 1011.
If a cause of action survives the death of plaintiff, the court may order the action to be continued by his representatives or successors in interest.
Sec. 269.16, Stats.
If undue influence or incompetency be established, and the deed canceled, the personal representative of Paul Keske, deceased, will have an interest in the recovery of the value the use of the property prior to the death. We conclude that the personal representative was therefore a proper party to participate with the heirs in the revival and prosecution of the pending circuit court action in order to establish such value.
Whether the personal representative should participate or not would depend upon an evaluation of the merits of the action, the value which might be recovered, and the expense involved. When the matter of appointment of a personal representative was before the county court, only a few days remained in which to act to revive the circuit court action. The duty would immediately devolve upon the personal representative to make an independent objective judgment on what must be done to protect the interests of the estate. Unless the allegations in the complaint in the circuit court action were completely sham, personal interest would prevent Elmer from performing such duty.
We note that certain assets of testator, cash and a note, had been deposited with the clerk of circuit court to abide the outcome of the action. If Elmer prevails in the action, these assets will be available to the personal representative, or to the distributees if the estate shall have been closed and these assets assigned. With respect to these assets, his position as defendant would be consistent with the interests of the personal representative. The parties have not suggested that the situation as to these assets gives rise to any conflict, and we see none.
2. Legal competency. "When a will shall have been admitted to probate the court shall issue letters testamentary thereon to the person named executor therein, if he is legally competent, accepts the trust, and gives bond when and as required by law." Elmer Keske's fitness was not challenged except for his personal interest in the action to set aside the conveyance.
Sec. 310.12, Stats.
A conflicting personal interest preventing an executor or administrator from doing his duty renders him unsuitable, and he may be removed.
Will of Zartner (1924), 183 Wis. 506, 511, 198 N.W. 363.
The question presented here is whether such conflict, if found by the court, is a proper ground for refusing appointment. Does a serious conflict of interest render a named executor not "legally competent?"
This court has never squarely decided whether a serious conflict of interest, existing at the time of appointment, is a proper ground for finding the nominee not legally competent. In Will of Zartner this court affirmed a removal on that ground. Mr. Justice JONES adverted in the opinion to the tendency of the courts to regard the nomination by the testator as largely mandatory. "Except for very cogent reasons the courts follow the maxim, `Whom the testator will trust so will the law.'"
Supra, footnote 8.
Supra, footnote 8, p. 512.
He also suggested circumstances in which an apparent conflict of interest should not be grounds for refusal of appointment:
"This conflict of interests in some cases may not be serious. It may have been known to the testator at the time of the execution of the will and may not have been regarded by him as an obstacle to the choice made. When the letters testamentary are issued the court may be of the opinion that the conflict is not so important as to affect the action of the executor or interfere with the proper administration of the estate.
"The attitude of the person named as executor may be such that there is reason to expect that an amicable adjustment may be made. Such circumstances as these may properly lead the court to appoint the person nominated in the will, although it is apparent that some conflict of interest exists or may arise."
Supra, footnote 8, p. 511.
An excerpt from an opinion in the trial court was set forth, stating that at the time of appointment the court has no right to anticipate adverse interest of the appointee.
Will of Zartner, supra, footnote 8, p. 512.
In the case before us, the facts giving rise to the conflict of interest did not exist at the time the will was executed, nor until after the testator's alleged incompetence; the trial court could properly consider the conflict as serious; the trial court was not anticipating a conflict which might occur in the future or might be avoided.
This court has not expressly adopted a definition of the phrase "legally competent." In Saxe v. Saxe this court decided that a nominee was legally competent as against objections that went "to his temper, his disposition, his habits, and his moral character, rather than to his capacity to do business." It has also been held that residence in Wisconsin is not required; indebtedness to the estate, and refusal under certain circumstances to surrender property of the deceased to the special administrator did not establish lack of legal competency.
(1903), 119 Wis. 557, 560, 97 N.W. 187.
Estate of Svacina (1942), 239 Wis. 436, 1 N.W.2d 780.
The most commonly accepted view elsewhere has been that one who is of sound mind and not subject to any express statutory disqualification is "legally competent" as executor. The supreme court of Nebraska, however, held that a nominee was not legally competent where his duties would require him to prosecute on behalf of adversary litigants a suit which he would defend as an individual. That court said:
Clark v. Patterson (1905), 214 In. 533, 73 N.E. 806; Trustees of House of the Angel Guardian v. Donoran (1946), 71 R.I. 407, 46 A.2d 717.
"In the sense used by the lawmakers, the term `legally competent' means fit or qualified to act as officer of the court and as trustee in administering upon the estate of testator according to judicial standards essential to the proper course of justice in the judicial department of government."
In re Estate of Blochowitz (1932), 124 Neb. 110, 112, 245 N.W. 440, 441. See In re Estate of Haeffele (1945), 145 Neb. 809, 18 N.W.2d 228.
A serious conflict between one's personal interest and an important duty of a personal representative may render adequate performance of that duty impossible. The situation may be one which the testator could not have foreseen. The particular duty may require immediate performance. The difficulty with the traditional definition of "legally competent" is that it appears to exclude this type of situation as a proper basis for refusal to appoint. It leads to the absurdity that the court might be required to appoint an executor which it should immediately remove.
We think that where the county court determines that a nominee's personal interest will prevent him from performing a duty as executor which must be performed immediately, and especially where the conflict is one which the testator did not know or foresee, the county court should refuse appointment. If this cannot be supported by defining legal incompetence to include such conflict of interest, it can be supported on the theory that the conflict of interest is a compelling ground for immediate removal, and it would be a vain act to appoint solely in order to remove.
There must be a measure of discretion in determining whether the particular conflict of interest is serious enough to prevent appointment or compel removal, and we find no abuse of discretion here.
Respondents previously moved to strike portions of the record transmitted to this court on appeal. We continued the motion, for consideration at this time. The portions objected to consist of proceedings had in county court in March and April, 1962, after the order appealed from, and in one instance after this appeal was taken. From them it appears, among other things, that the administrator and heirs sought in circuit court to revive the action; that in March the circuit court granted revival as to the heirs but denied it as to the administrator; that in the light of the order of the circuit court the county court instructed the administrator not to pursue the circuit court action further.
We now grant the motion to strike. Our determination of whether or not the county court erred in its order of January 31st must be based on the facts before it as of that date. Subsequent proceedings in the circuit or county court are immaterial. Respondents are entitled to motion costs.
By the Court. — Order affirmed. Motion to strike portions of the record granted. Respondents may tax $25 costs on motion as well as costs on appeal.