Ohio Merchants Trust Co. v. Conrad , 42 Ohio App. 150 ( 1931 )

This cause is in equity. It is disclosed at trial that an appeal in this matter had been attempted to be perfected, but for some reason or other the cause does not seem to be docketed as an appeal case, and the Ohio Merchants Trust Company, Administrator, plaintiff in error herein, elected to and did submit the cause to this court as an error proceeding.

Laura S. Conrad, who was the widow of Charles Conrad, deceased, and whom we will style the plaintiff, seeks by her petition filed in the court of common pleas to cancel a certain written instrument which she had signed and by the terms of which she elected to succeed to the estate of her husband under his will. This petition recites many facts, some of which will be hereinafter referred to. The answer, as filed by the trust company, admits many of these facts to be true and further denies the allegations of the petition. As a further defense, certain facts are alleged under which it is claimed that the plaintiff is estopped and that by her conduct she has elected to take under the will of her deceased husband.

The pertinent facts in this case, which are admitted by the pleadings and in the evidence, are as follows: On the 21st day of March, 1928, Charles Conrad, the plaintiff's husband, died testate, and by the terms of his last will and testament bequeathed and devised all of his estate to his wife, it, however, being provided that all his debts be first paid. It further appears that the plaintiff was familiar with the provision made for her by her husband in his will. It is also shown that the plaintiff was possessed of no estate of her own, that she was a woman about sixty years of age, that for the past fifteen years she had been a partial invalid, and that she was a woman of no business experience.

It is undisputed that the husband left real estate valued at about the sum of $265,000, and personalty of the value of about $13,000. These figures represent the values as fixed by the appraisers of the estate.

It also appears that the decedent was one of the two sons of Silas and Adelaide Conrad. They each died prior to the death of the testator, and each was possessed of an estate. These two respective estates had never been administered according to law, and each estate left an indebtedness for which the decedent testator was liable for the half thereof.

It also appears that the total indebtedness of the testator — that being not only the debts of his estate, but also the debts of his father and mother's estate — amounted to a sum of around $190,000.

Harry B. Conrad, the brother of the testator, who was a defendant in the trial court, was liable for the remaining half of the indebtedness of his parents. It is also a fact that most of the real estate, or the more valuable part thereof, of which the testator died seized, was the property of the testator and Harry B. Conrad, in equal shares. Two further facts are worthy of notation: First, that the testator and the plaintiff had no children; and, second, that the testator's property was free from any incumbrance, and that the plaintiff was not individually liable for any part of the $190,000 indebtedness.

Before proceeding further to enumerate the essential facts involved, we deem it proper to state that the trial court determined that the prayer of the plaintiff's petition be granted, and that the election made by her in writing be set aside and held for naught. The petition in error as filed in this court recites but one ground of error, that being that the judgment was given for Laura S. Conrad when it ought to have been given for the trust company.

Returning now to the further facts, it appears that on the 2d day of April, 1928, the plaintiff and Harry B. Conrad declined in writing to accept appointment as personal representatives of the estate of Charles Conrad, and they therein requested that the trust company be appointed as administrator, with the will annexed, of the estate.

The evidence further shows that the trust company was a creditor of the estate of the testator, and also of the estate of the testator's father and mother, in a total amount of around $40,000, and that the trust company held no security therefor. It is a disputed fact in this case whether or not the trust company solicited the plaintiff for her consent to its appointment as administrator. It also is disputed whether one McCaughey, an attorney, since deceased, also participated in this solicitation.

It further appears from the evidence that the appraisement of this estate was made on the 6th day of May, 1928, and that such was made by competent appraisers. It also appears that at some time during the first part of the year 1928 the plaintiff had some talk with McCaughey and Judge Pontius, another attorney at this bar, concerning the matter of a widow's election to be made by the plaintiff in this estate. Just what was said at this conference is in dispute. The charge is made by the plaintiff that what was said at this conference caused her to make the election in this estate. It appears that some time in May she had received notice from the probate court, and that she exhibited this notice to these two attorneys, and that they told her that she must make an election within the year. The plaintiff vigorously denies that these two attorneys in any way explained to her the provisions of the law, especially those which would be most advantageous to her, and failed to specify in what order the debts of the estate would be paid with reference to her share therein in either event. This the trust company denies, but we find from a search of the record that there is practically no testimony produced in this case showing that she was fully advised as to her rights and as to the law, of which she now complains to have had a lack of knowledge at the time.

It appears that, from this conversation, and the determination of the plaintiff then made to elect to take under the provisions of the will, she thereafter, on March 1, 1929, went to the office of one Mr. Schultz, the trust officer of the defendant bank, and in his presence made the written election to take under the will, and that Mr. Schultz, being a notary public, then took her acknowledgment to this election. It further appears from the plaintiff's testimony that Schultz had said to her, or suggested, that it would not be honorable for her to take under the law. This, on the part of Schultz, is denied.

The plaintiff claims that this election is null and void for the reason that Schultz, as the trust officer of the defendant trust company, was disqualified by reason of the provision of Section 121, General Code, and for the further reason that the defendant trust company was an interested party in the settlement of the testator's estate.

Section 121, General Code, provides: "No banker, broker, cashier, director, teller, or clerk of a bank, banker or broker, or other person holding an official relation to a bank, banker, or broker, shall be competent to act as notary public in any matter in which such bank, banker or broker is interested."

It therefore becomes apparent that it was necessary to determine whether or not the defendant bank was interested in the matter of the settlement of this estate. We believe that this question should be answered in the affirmative. It is plain and clear to us that should the widow in this estate be held to have elected to take under the will, the debts of the estate would be paid in full before the widow would receive any portion thereof. Now, the trust company held $40,000 of unsecured claims as against the testator's estate. This it was, no doubt, anxious to protect. On the other hand, it is equally clear that should the widow be held to elect to take under the law she would be first entitled to her share of the personal estate and a dower interest in the real estate before the payment of any debts. It therefore seems to us that the bank was vitally interested in this matter, due to the further fact appearing in this case that, upon petition and order of the probate court, it was impossible, at the appraised value, to sell or procure a bidder for the more valuable real estate possessed by the testator, and we may say at this time that it appears to us that the widow in this case was rather encouraged in her idea that the properties would sell at the appraised value, and that they were, in fact, worth more and would sell for more than the appraised value. It does not appear from the evidence that it was suggested by any one to her that the real estate might be sold at a much less figure than the appraised value, or that it might have to be reappraised and further offered for sale. And it now appears from the evidence that there is no bidder for this expensive property, that land values have shrunk, and were shrinking at the time of the appraisement, and that the widow was not advised thereof.

Reverting now to Section 121, General Code, we comment that counsel have studiously set forth the earlier enactments pertaining to those who were disqualified as acting as a notary public in certain cases, but we believe that it is not profitable to engage in a recitation of the early history of this act, further than to remark that at the time of and prior to its enactment the great majority of the people lacked confidence in banks, and that as this distrust disappeared the statute was re-enacted, removing many of the restrictions theretofore imposed, but we do not believe that it was the intention of the legislation then, and as the law now stands enacted, to rather protect the people than the bank.

Counsel also comment at length upon whether or not the act of a notary public is a ministerial or judicial act, but this we do not deem necessary to consider. We believe that this section is clear, explicit, and needs but little, if any, interpretation, and, having determined that the trust company was an interested party, it must follow that its trust officer was not a competent person to act as notary public in taking the widow's acknowledgment to her election, and that the election as made is null and void.

As a second and third reason advanced by the plaintiff, it is claimed that her election was induced and procured by fraud, and, further, that she was not cognizant of her rights in case she elected to take under the law; that her election was no election. In answer to this claim the trust company denies the charge of fraud, and further asserts that the plaintiff, in conjunction with Harry B. Conrad, had executed a number of papers in which she treated the property as her own, which are conclusive of the fact that she had, by her own conduct, elected to take under the will, one of these papers being a trust agreement whereby the plaintiff and Harry B. Conrad had named the trust company as trustee to do certain things; that certain deeds were made and executed for several of the less valuable pieces of real estate.

We would now consider whether or not her conduct in this respect can be construed as an election to take under the will upon the part of the plaintiff. We would answer this question in the negative. Considering all of the evidence in this case, we find that it is not intimated that the plaintiff received any knowledge or advice concerning the matters of this estate from any other person save and except her brother-in-law, the two attorneys previously mentioned, the president of the trust company, and its trust officer, Mr. Schultz. The record does not disclose that the plaintiff was apprised or had a full knowledge of the condition of the estate, and of her rights therein, but the testimony of the plaintiff positively states that she had no such knowledge.

We find that our Supreme Court in the case of Bell v. Henry,121 Ohio St. 241, at page 249, 167 N.E. 880, considered what is now known as Section 10571, General Code, which provides that a widow's election may be made before a proper officer competent to take her acknowledgment to the same. We note from that case that the court stated that an election so made is a valid election, "if the provisions of the will and her rights under it, and under the law in the event of her refusal to take under the will, have been fully explained to her prior to the making of such election."

Now, the fact further appears that McCaughey and Pontius were the attorneys for the trust company in the matter of the settlement of this estate, and it appears from the Trust Company's Exhibit No. 11 that these attorneys thereafter submitted a statement to the trust company for services rendered in this estate, and it appears that this account begins with a consultation of McCaughey with the plaintiff concerning the provisions of the testator's will on the 24th day of March, 1928, just a few days after the decease of Charles Conrad. It also appears from the testimony in this case that the plaintiff and her brother approved of this statement and that the bank paid for the attorney services so rendered.

It therefore appears that throughout the administration of this estate these two attorneys unquestionably represented the bank as its attorneys and agents in this estate and in the matter of all dealings with the plaintiff.

It is not clear from the evidence whether or not McCaughey and Pontius were the attorneys for the plaintiff. The plaintiff says that they were not her attorneys. On the other hand, the trust company asserts that they were her attorneys, and from an examination of all of the various conflicting statements in this case we believe the truth to be that the plaintiff did feel that these attorneys were her attorneys as well as attorneys of the trust company, but that they were to be paid by the administrator of the estate. In view of the fact that we have hereinbefore found that the trust company was interested in the settlement of this estate, we must now conclude that the positions of the trust company and the widow were inconsistent, and that what would have been good advice to the administrator, perhaps, was not good advice to the widow.

The bank in this case, as administrator, stood in a fiduciary capacity. It was dealing with this estate and the estates of other creditors, and on the other hand, with the plaintiff, the sole person who would inherit the estate. We believe that the plaintiff was entitled to receive from the trust company full disclosures as to all matters and things pertaining to the estate and the probable financial outcome of its settlement. The bank and its agents, therefore, had no right to remain silent in the matter, and the widow should have been fully advised.

It appears that on the trial of this case the defendant bank introduced in evidence two certain letters over the objection of the plaintiff, the first of which was written a year and nine months after the death of the testator. In them she addresses the bank's attorney as her attorney. Now, without these two letters in this case, there is practically no testimony going to prove that the widow did have knowledge of the extent of the estate and the probable outcome of its administration. If our conclusion is right that the testimony in this case preponderates to the effect that the bank's attorneys were her attorneys and supports the claim of the defendant bank that they were her attorneys, then in such event it appears to us that these communications were privileged communications as between an attorney and client and should have been excluded. On the other hand, if the bank's attorneys were not her attorneys, these letters were admissible as declarations against interest; but an examination of these letters in certain respects confirms us in our view that the plaintiff was not fully advised of her rights and of what would be for her best interest, and we note that she therein refers to the purported statement as made by the trust officer of the bank, where she refers to the matter of its being dishonorable to have elected to take under the law; and we would again note that no one testifies in this case to the fact that the widow had any knowledge of the condition of the estate, nor of the probable outcome thereof, keeping always in mind the expression of the court in Bell v.Henry, supra, and of the fact that it is therein said that the election of a widow taken before a notary public does not in itself dispense with the prerequisite that the widow be advised of her interest.

Considering further the papers signed by the plaintiff, we must remark that such all seem to have been prepared by the bank's attorneys, no doubt at its instance, and the widow fully trusting in the signing of these various papers was but acquiescing in the procedure as carried forward by the bank in its administration. The estate has not as yet been settled. No innocent third party is affected by a setting aside of this election, and we see no acts that would constitute an election by conduct on the part of the widow herein.

A further claim is made by the widow in this suit, but we do not deem it necessary to consider that question, and, holding as we do to the things herein found, it is the judgment of this court that the judgment be affirmed.

Judgment affirmed.

LEMERT and MONTGOMERY, JJ., concur.