Opinion
No. 27890
Decided April 24, 1940.
Fiduciaries — Proceedings to discover concealed or embezzled assets of estate — Section 10506-67 et seq., General Code — Not substitute for civil action to recover judgment for money owing — Court to dismiss complaint where defendant found not guilty.
1. The purpose of Sections 10506-67 to 10506-77, inclusive, General Code, relating to proceedings to discover concealed or embezzled assets of an estate, is not to furnish a substitute for a civil action to recover judgment for money owing to an administrator or executor, but rather to provide a speedy and effective method for discovering assets belonging to the estate and to secure possession of them for the purpose of administration.
2. Where, in such proceeding, the defendant is found not guilty of concealing or embezzling assets of the estate of the decedent, the court may not proceed to determine other issues, but has no alternative except to dismiss the complaint.
APPEAL from the Court of Appeals of Knox county.
William H. Anderson loaned money to his son, C.F. Anderson, defendant, and received from the latter two notes for $1,000 each and one note for $560, all dated April 1, 1923. These notes were never paid. About six months before his death the father gave the notes to the defendant. After the death of the father, William H. Anderson, S.W. Goodrich, plaintiff herein, was appointed administrator of his estate and filed a complaint in Probate Court in form as follows:
"To the Probate Court of said county:
"The undersigned respectfully represents that he is administrator of the estate of William H. Anderson[,] that he has good reason to and does suspect that C. Frank Anderson is in the possession of moneys, goods, chattels, things in action, or effects of the estate of said William H. Anderson.
"Wherefore he asks that a writ of citation may issue against the said C. Frank Anderson requiring him forthwith to appear before said court, then and there to be examined on oath or affirmation touching the matter of this complaint, and that such proceedings may be had in the premises as are authorized by law.
"S.W. Goodrich."
Hearing was had upon this complaint and the Probate Court made a finding "that the said notes complained of were assets of the said William Anderson, deceased, and the administrator is hereby directed to proceed to institute such action as may be necessary and proper for the recovery of the same."
An appeal from this order was perfected to the Court of Common Pleas where a jury trial was waived and the court made the following finding and judgment: "I find from a preponderance of the evidence, that C. Frank Anderson is not guilty and dismiss this complaint." The Court of Appeals affirmed the judgment of the Court of Common Pleas. This court granted a motion to certify the record.
Messrs. Olds McCarty, for appellant.
Mr. Robert L. Carr and Mr. Charles M. Zelkowitz, for appellee.
The original proceeding was filed by the administrator in Probate Court under favor of Sections 10506-67, 10506-73 and 10506-75, General Code. It is a special proceeding to discover assets of an estate which have been concealed or embezzled.
The immediate issue raised in the trial in the Court of Common Pleas concerns the admissibility of evidence relative to the mental capacity of the father of the defendant when he gave the latter the notes. The defendant testified that he had received the notes as a gift. The administrator thereupon sought to introduce evidence to prove that the father was mentally incompetent to make such a gift. Refusal of the Court of Common Pleas to admit such evidence is the principal error assigned and urged by the plaintiff in this case.
The primary purpose of the proceeding was to discover assets. The complaint stated that the administrator had good reason to suspect that the defendant had in his possession certain notes, goods and chattels of the estate. The complaint was not a pleading containing a cause of action and prayer for a money judgment upon the promissory notes. The complaint under the law did not require nor was there any answer filed by the defendant. The only issue raised by the complaint was whether the defendant, C. Frank Anderson, concealed any assets of the estate of William H. Anderson. It was an inquiry into certain facts and circumstances. The evidence clearly showed that the defendant had received the notes from his father about six months before the latter's death. The son testified to this. There was no concealment about the matter. He further testified that he burned the notes within a week after his father gave them to him.
What the mental capacity of the elder Mr. Anderson was at the time he gave the notes to his son was not an issue in the proceeding. Whatever right the administrator may have to file a civil action against the defendant in respect to the promissory notes is not an issue here. In such an action the mental capacity of the father to make such a gift would no doubt become a material issue. In this proceeding it is premature. The Court of Common Pleas was not in error in excluding evidence regarding the mental capacity of William H. Anderson.
The character of the proceeding is the same in the Court of Common Pleas as in the Probate Court. It is special and does not come within the orbit of a civil action for money only. While the authority of the court under such a proceeding is very broad for the purpose of discovering concealed or embezzled assets, it is not broad enough to litigate all the issues in the instant case, where the ultimate objective is a money judgment and where there has been no concealment of assets. To that extent there is a limitation upon the "plenary power" granted to Probate Court in the last paragraph of Section 10501-53, General Code. In reaching this conclusion we are not required to determine how extensive such a proceeding may be under other facts or circumstances. It is urged that Section 10506-73, General Code, provides for a jury trial when demanded. That is true, but not primarily for the purpose of rendering a money judgment on the promissory notes but rather to try the issue of whether there has been a concealment of assets.
Section 10506-67, General Code, provides that such complaint may be made "by a fiduciary, creditor, devisee, legatee, heir or other person interested in the trust estate," or even "by the creditor of any devisee, legatee, heir or other person interested in the trust estate." (Italics ours.) The fact that any such enumerated person may file the complaint is an index of the character of the proceeding authorized. Under the same section of the code the Probate Court is authorized on its own motion to initiate such proceedings, in which event there would be no plaintiff in the first instance. The proceeding is special and designed to facilitate the administration of estates, but it may not be used primarily as a substitute for a civil action for a money judgment wherein pleadings are required properly to define the issues.
The special proceeding instituted on such a complaint is quasi-criminal in character. Section 10506-73, General Code, provides that where the court finds a person guilty of concealing assets it shall render judgment against such person for the value of the effects so concealed plus a ten per cent penalty. But in a civil action for money only on these notes there could be no ten per cent penalty added to the judgment. Nor is there any authority in this proceeding under Section 10506-73 for a money judgment to be rendered without the ten per cent penalty. Therefore, in order to have jurisdiction to proceed to a money judgment in such a proceeding, there must first be a finding that there has been a concealment of assets. But if there be no concealment, as in the instant case, the court has no authority to proceed further. Under such circumstances the proper procedure is to dismiss the complaint as was done by the Court of Common Pleas.
The judgment of the Court of Appeals will be affirmed.
Judgment affirmed.
ZIMMERMAN, WILLIAMS, MATTHIAS and HART, JJ., concur.
The limitation imposed by the majority decision destroys the effect of the amended statutes by which the Legislature clearly expressed its intention to broaden greatly the jurisdiction of the Probate Court and thereby provide an effective, alternative remedy for the discovery and recovery of assets of an estate. It is difficult to imagine more comprehensive language than that found in the following jurisdictional excerpt from Section 10501-53, General Code:
"The Probate Court shall have plenary power at law and in equity fully to dispose of any matter properly before the court, unless the power is expressly otherwise limited or denied by statute." (Italics supplied.)
The majority opinion makes passing reference to this provision but significantly fails to point out a single statutory limitation thereon.
DAY, J., concurs in the foregoing dissenting opinion.