State Ex Rel. Larson v. Probate Court , 204 Minn. 5 ( 1938 )

It is a premise, both illuminating and inescapable, that in solving questions of jurisdiction as between probate and district courts "the law is concerned not so much with working out an abstract and ideal harmony with respect to the limits of this dual jurisdiction as it is with the efficient administration of practical justice thereby." Brown v. Strom,113 Minn. 1, 5, 129 N.W. 136, 137.

Next, we are dealing with attorneys and their compensation. Attorneys, as officers of the court, are subject to its "orders and directions in respect to their relations to the court as well as to their clients." Charest v. Bishop, 137 Minn. 102,105, 162 N.W. 1063, 1064. An order fixing their compensation, made after due hearing, in which the attorney participates in his own behalf, is a judgment rendering the issue res judicata. Truesdale v. Farmers' L. T. Co. 67 Minn. 454, 70 N.W. 568,64 A.S.R. 430. An attorney to a case is a "stranger" to it only in the sense that in the ordinary case he litigates nothing on his own behalf. The moment he comes in to try for himself an issue as to his compensation, he becomes a party. State ex rel. Nordin v. Probate Court, 200 Minn. 167, 273 N.W. 636.

Historically and essentially, negation of the probate court's possession of equitable jurisdiction is wholly untrue. Originally, everything any court did in respect to what is now probate law was done by courts of equity. State ex rel. Martin v. Ueland, 30 Minn. 277, 280, 15 N.W. 245. "Much of the jurisdiction of the old court of equity, and some of the jurisdiction of the courts of common law" in the field of probate law, "has been transferred to the probate court." McNamara v. Casserly, 61 Minn. 335, 342, 63 N.W. 880, 883.

The former jurisdiction of courts of law and equity, exercised through actions in personam, was inadequate to complete administration. Therefore "the legislature deemed it proper that the whole world should be bound by the administration proceedings, and to accomplish this provided a proceeding in rem. This proceeding is not according to the course of the common law, and is not a mere substitute for any proceeding known to the common law * * * its scope and purpose are wholly different." McNamara v. Casserly, supra, at p. 343.

Our probate court is one of record and, in its domain, of superior and general jurisdiction. Davis v. Hudson, 29 Minn. 27,11 N.W. 136; In re Will of Mousseau, 30 Minn. 202,14 N.W. 887. When properly invoked, it "attaches to the particular estate for the purpose * * * of supervising, directing, and controlling its administration and settlement according to law." Culver v. Hardenbergh, 37 Minn. 225, 234, 33 N.W. 792,797. In other words, both constitution and statute contemplate that the job of administration, with all its necessary incidents, be fully performed in the probate court. State ex rel. Nelson v. Probate Court, 199 Minn. 297, 271 N.W. 879.

That cannot be done, the task cannot be finished, the estate cannot be distributed, until the expenses of administration are first ascertained and paid by the representative. Is it not then plain that fixing attorney's fees by judicial action in the probate court is within its jurisdiction? That jurisdiction "continues over the administration, as one proceeding, until its close; * * * all the court may do in the course and for the purpose of administration * * * is sustained" by the jurisdiction acquired at the outset. Culver v. Hardenbergh,supra. Accordingly, in Kelly v. Kelly, 72 Minn. 19,74 N.W. 899, it was held that the probate court had jurisdiction to allow and order paid out of the estate of an insane person the witness and attorney fees incurred upon a hearing on the petition of the insane person to be restored to capacity.

Kelly v. Kelly was followed in In re Guardianship of Kaplan,187 Minn. 514, 517, 246 N.W. 5, wherein the power of the probate court "so to authorize" is stressed. "Being necessary for the protection of the ward's legal rights," said Mr. Justice Olsen, "it must be held that these expenditures stand on the same footing as expenses for necessary food, clothing, and other requirements for the ward." Upon like reasoning this court held, in State ex rel. Gage v. Probate Court, 112 Minn. 279,287, 128 N.W. 18, that the duty to determine inheritance taxes was properly imposed by statute upon the probate court as an incident of administration. It was considered beyond doubt that "such jurisdiction includes every matter necessarily connected with the administration of estates, as well as the conduct and duties of executors and administrators." Are or are not these cases overruled?

May I inquire why, if the district court may, in a proceedingin rem, fix attorney's fees, the same power should be denied to the probate court in a proceeding in rem of which it has exclusive jurisdiction? In a proceeding involving a trust in the district court no one would question that court's power to fix the fees of an attorney, as in Watkins v. Bigelow, 96 Minn. 53,104 N.W. 683. The same practice applies in receivership proceedings. That analogy controlled decision in Carpenter v. U.S. F. G. Co. 123 Wis. 209, 101 N.W. 404.

In Wisconsin the powers of the county courts in probate matters are fixed by a statute extending jurisdiction "to all matters relating to the settlement of the estate of such deceased persons." (Our probate court has all that power.) In consequence, the court concluded [123 Wis. 214, 101 N.W. 406]:

"That broad general power necessarily carries with it by implication all judicial authority of courts of equity in the administration of trusts necessary to the proper administration of the particular class of trusts in question * * * 'The county courts have plenary jurisdiction in all matters of the administration * * * and much of this jurisdiction is of an equitable character and is necessarily concurrent with that of courts of equity.' "

The court said further [123 Wis. 214, 215, 101 N.W. 406,407]:

"By reference to the authorities in respect to the power of courts of equity dealing with judicial trustees generally, we may easily determine the measure of the authority of our county courts in dealing with the questions under consideration. We apprehend that time need not be spent demonstrating that a trustee in a judicial administration in equity may not only be permitted to pay out of the trust fund any legitimate expense incurred in the conservation thereof, but may be, when necessary to the ends of justice, required to do so, and when so justly required that the adjudged expense may be made by order of the court a lien upon such fund * * *. True, the attorney in such a case has no lien thereon until the court gives him aid in the matter. His claim is purely personal to the trustee. The rule in that regard is not peculiar to the class of trusts we have here. It is a general rule applicable to all trusts. Every attorney who performs beneficial services to a trust, directly or in effect enriching the trust fund, when it is necessary for his protection, is equitably entitled to obtain a lien upon the trust fund. The court has ample authority to recognize and give effect thereto. * * * Central R. B. Co. v. Pettus, 113 U.S. 116, 124, 5 Sup. Ct. 387,28 L. ed. 915. Justice Harlan in that case said: 'When an allowance to the complainant is proper on account of solicitors' fees, it may be made direct to the solicitors themselves, without any application by their immediate client.' See, also, Trustees v. Greenough, 105 U.S. 527,26 L. ed. 1157; Schmidt v. Oregon G. M. Co. 28 Oreg. 9, 40 P. 406 [1014, 52 A.S.R. 759]; Laroque v. Candolle, 4 Md. Ch. 347. The cases where such claims have been ordered paid out of the trust fund as trustee's expense are numerous."

On such reasoning and such authority did the Wisconsin court hold that its county courts, in the exercise of a probate jurisdiction corresponding to ours at all points, have the power to make an allowance for attorney's fees. Not only that, it considered that allowance, made in the administration proceeding, res judicata, and so binding on the surety of the administrator.

Mr. Justice Olson's thought is that the probate court does not have the power in any case to fix the fees of the administrator's attorney, because it is lacking in the equitable jurisdiction considered necessary to that end. That view, I submit most deferentially, ignores the very factor determinative of the whole issue. That factor is the possession by the court of every power, every item of jurisdiction, legal or equitable, necessary to complete performance of the task of administration.

Its power to divide an insolvent estate between creditors admitted, it must follow that the probate court has every power needed to ascertain how much remains for division. It must then determine and provide for payment of all expenses of administration, including attorney's fees.

So also, creditors nonexistent or all paid, must the probate court distribute what is left. But in all cases it must first ascertain how much there is to distribute. That cannot be done without first determining and providing for payment of the expenses of administration. Therefore the court must and does possess the judicial power to determine, that is, to fix with finality (subject to review) the amount of such expenses, including attorney's fees.

Many of the cases cited by 2 Woerner, Am. Law of Administration (3 ed.) pp. 1181-1187, hold that probate courts have the very jurisdiction now denied. Mr. Justice Olson attempts to distinguish such cases by saying, in effect, that the courts involved, for example the county courts of Wisconsin and Nebraska (see Carpenter v. U.S. F. G. Co.supra; Hazlett v. Estate of Moore, 89 Neb. 372, 131 N.W. 589), are courts of general jurisdiction, or at least of broader jurisdiction than that of our probate court. My answer is that our probate court has, under our constitution and statutes, precisely the jurisdiction held to exist in such cases, that is, a complete jurisdiction for the task assigned to it by law.

As usual, it is impossible to run a continuous boundary to mark off, all the way, the field of one court from that of another. There are zones where jurisdiction is concurrent and so left to regulation by statute. "What shall be done in the course and for the purpose of administering such estates is to some extent in the power of the legislature to prescribe. It may provide for some things which, though not necessary to administration, are appropriate to it." Mousseau v. Mousseau,40 Minn. 236, 238, 41 N.W. 977, 978. That explains our legislative scheme whereby contract claims against the deceased are proved and enforced in the probate court, whereas claims in tort remain for enforcement in the district court. Comstock v. Matthews, 55 Minn. 111, 56 N.W. 583.

In the Mousseau case the court went on to say that: "other things are clearly foreign to administration, and jurisdiction over them cannot be conferred on the probate courts by the statute." In the latter category, I take it, are cases for specific performance, Mousseau v. Mousseau, supra, and rescission, State ex rel. Nelson v. Probate Court, 199 Minn. 297, 271 N.W. 879.

There we have a perfectly conventional situation where a second court must act before a first can pronounce judgment in a matter pending before it. For example, receivers, trustees of court controlled trusts, as well as executors and administrators, frequently must resort to ordinary litigation at law or in equity, or are forced into it by others, in matters which affect their fiduciary functions. But to me it seems anomalous and indefensible to put into that category an issue necessarily incident to the administration itself. Appraisers' fees in large estates run into substantial sums. The appraisers are certainly not as much officers of the court as attorneys. I take it no one would suggest that the court appointing them could not fix the fees of appraisers. Precisely the same elements of logic and practical administration support the fixing of attorney's fees.

It is, I submit, quite irrelevant to suggest possible unconstitutional denial of trial by jury if the probate court is held to have this jurisdiction, now questioned for the first time in our history and twice before affirmed by this court. Attorneys, in respect to the summary power of the court over them, have not and never did have any right to jury trial. We are dealing, also, with issues which at the time our constitution was adopted were of an equitable and probate nature, and so without the right to jury trial in any party. Finally, the field of consideration lies within the scope of a completely new proceeding in rem, a proceeding unknown to the common law, and so without right to jury trial in anyone interested in the proceeding as such. Here again are not to be included issues so far foreign to administration as to require solution by independent action at law or in equity. Many such cases, brought by or against administrators, executors, receivers, and ordinary trustees, will carry the right of jury trial to one or both of the litigants.

Fixing attorney's fees in a matter of this kind may decide no issue in personam except as it binds those who have notice or actually litigate the question. 3 Freeman, Judgments (5 ed.) p. 3134. All such a decision does, in a proceeding in rem, is to determine how much the attorney is to get out of the res, and of that res, I repeat, the probate court has exclusive jurisdiction in an administration proceeding. That power is not denied to the district court in a similar case in rem. Upon what ground may it be denied to the probate court, which has complete powers for administration in rem?

To illustrate — a cause of action for wrongful death is given to the representative simply as "a matter of convenience." It might as well have been given to any other "in trust for the widow and next of kin." Aho v. Republic I. S. Co. 104 Minn. 322, 326, 116 N.W. 590, 592. Of such an action and its proceeds the district court, and not the probate court, has jurisdiction for complete administration. In State ex rel. Scannell v. District Court, 114 Minn. 364, 131 N.W. 381, we dealt with an order for distribution of the proceeds of such an action which reduced the fee of the attorney, who was also the special administrator. Disappointed, he disobeyed the order, and we sustain his conviction for contempt. It is no answer to that convincing analogy to say, as the truth is, that the district court is one of general jurisdiction. The jurisdiction of the district court, in actions of wrongful death, is for the purpose of administering and distributing a fund. So also, and precisely the same and just as general and complete, is that of the probate court as to estates of deceased persons.

In the Scannell case [114 Minn. 366] the relator was punished as "an officer of the court * * * subject to punishment" for his contempt in disobeying "the order to pay over the money." The probate court may also punish for contempt. 2 Mason Minn. St. 1927, § 8701. But, if this decision is right, and the probate court has no jurisdiction to decide anything at all concerning attorney's fees, it cannot punish a representative for refusal to pay an attorney what has been allowed. Nor can the court punish the attorney for withholding funds of the estate, if he has them, in a larger sum than the allowance. Disobedience of an order void for want of jurisdiction is not contempt.

We are not now interested in any question as to personal liability of the representative. It is enough that the probate court may adjudge the liability of the res which is within its jurisdiction.

If there is no jurisdiction, whatever the court does in respect to attorney's fees and other similar expenses of administration is a nullity, no matter what anyone says to the contrary. A mere credit to the representative is no protection either to him or to the attorney. One may refuse to pay what has been allowed. The other may sue for more. Or the representative may pay, and an heir, at any time within the period of limitations, may sue either or both to recover an alleged overpayment. To aver otherwise, to assert that anyone is bound for any purpose, is to admit judicial effect, that is, jurisdiction, for that which does the binding.

The holding of no jurisdiction, I submit, thwarts the undenied and progressive intention of constitution and statute that the probate court shall finish the job of administration assigned to it. It invites a multiplicity of litigation (Hazlett v. Estate of Moore, 89 Neb. 372, 131 N.W. 589), which our law purposely seeks to avoid. By so much this decision seems to me to turn back procedural progress by not less than two-thirds of a century.

Any recrudescence of juridical atavism which is both avoidable and regrettable is abhorrent to all of us — as much so to my brethren of the majority as anyone. I have but tried to blaze a trail of law and reason which would lead us forward rather than backward. Why it should not be followed is, for the reasons herein stated (with all but complete futility), simply beyond me.