In re Estate of Ferris

182 N.E.2d 78, 88 Ohio Law. Abs. 597, 19 Ohio Op. 2d 428, 1962 Ohio Misc. LEXIS 278
CourtCuyahoga County Probate Court
DecidedMay 7, 1962
DocketNo. 553646
StatusPublished

This text of 182 N.E.2d 78 (In re Estate of Ferris) is published on Counsel Stack Legal Research, covering Cuyahoga County Probate Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Estate of Ferris, 182 N.E.2d 78, 88 Ohio Law. Abs. 597, 19 Ohio Op. 2d 428, 1962 Ohio Misc. LEXIS 278 (Ohio Super. Ct. 1962).

Opinion

Merrick, P. J.

This cause comes on for finding and decision pursuant to an order of this court entered March 27, 1962, wherein this Court, on its own motion, pursuant to authority and jurisdiction conferred by Section 1107.16, Revised Code, ordered an investigation into the affairs and management of the within estate and trust by The Cleveland Trust Company as corporate fiduciary and Howard L. Barkdull as co-fiduciary.

It is necessary to recite and to review many facts and circumstances incident to this administration, particularly with reference to the conduct and activity of the co-fiduciaries in connection with the dissolution of the Cleveland Savings Society in the Court of Common Pleas, No. 719,002. This litigation will be referred to as the “Society ease and the Society bank as Society.” The corporate fiduciary herein will be referred to as Cleveland Trust and the co-fiduciary as Barkdull.

This Court appointed Paul B. Roeseh, Esquire, as investigator. Mr. Roeseh brought to this assignment his reputation at this bar as a lawyer of long standing and capability and a wealth of experience in probate practice. To him this Court expresses a feeling of gratitude and commendation for the diligent and efficient manner in which he carried out this most important trust. At the outset Mr. Roeseh stated to the Court that he desired no compensation and would seeek none and that further, he would personally absorb all expense incidental to carrying out the commission of the Court.

Much of the evidentiary phase of the investigation is presented by interrogatories and the answers thereto and documentary evidence and exhibits. These will be kept on file in this case and may be perused by any interested person.

The co-fiduciaries herein were appointed March 11, 1958. The inventory, filed May 21, 1958, and thereafter approved, disclosed an estate in excess of seven and one-half million dollars, mostly in securities. There was a bank account with Society in the amount of $116,000.00. There was considerable holding in Du Pont common stock which was appraised at [599]*599$6,706,152.00. Tbe decedent, Mrs. Ferris, had been a depositor in Society in substantial amounts and balances for more than twenty-five years preceding her death. Tbe will conferred upon the fiduciaries tbe usual broad powers of control and investment. Tbis is standard language in wills in large estates and tbe scrivener of tbe will usually follows a form or advice of tbe trust company to be named as fiduciary in drawing such a will. If tbe powers are too limited, or tbe estate too small, corporate trustees usually decline tbe appointment for tbe simple reason that they prefer broad powers and cannot profitably handle small estates. Tbe fiduciary fees are fixed by statute and rule of court, depending upon tbe extent of the assets in tbe estate.

According to tbe accounts filed by Cleveland Trust in tbe Ferris estate to date it has paid itself $137,500.00; Squire, Sanders and Dempsey $80,000.00 and Howard Barkdull $37,-500.00 for services rendered to tbe estate, or a total of overall fees of $255,000.00.

It is significant to note that tbe first partial account, filed February 20, 1959, and tbe second partial account, filed April 27, 1960, bore tbe endorsement of Harvey Hobson and bis firm, Thompson, Hiñe and Flory as attorneys for tbe fiduciary. Upon inquiry by tbe court investigator it was determined that Mr. Hobson and Thompson, Hiñe and Flory rendered no services in tbis estate and prepared no documents or accounts. It has been tbe practice of some trust companies, including Cleveland Trust, to prepare accounts and other legal documents and in tbe bank offices endorse tbe name of counsel chosen by it and file same without tbe law office performing extensive services in tbe estate. While tbis Court is interested in keeping corporate trustees within their proper area in these matters, this does not seem to be tbe time or place to reiterate in too much detail tbe admonition that banks should not practice law and should observe tbe law that permits them to act as their own counsel when acting as fiduciary but should apprise tbe Court when so acting. In tbis investigation it became necessary for tbe Court to examine tbe file in tbe estate of McCambridge, Probate Court No. 542308. In tbe office of tbe Cleveland Trust Company, there was prepared by tbe employees of that bank a petition for distribution. This was forwarded to the fiduciary [600]*600in Toledo, Ohio, for execution and verification; was returned and on December 31, 1961, filed by the bank with a Referee of Probate Court. There was no indication that any counsel had prepared the pleading. A copy was sent by the bank to Roland Reichert, attorney for the estate, but he had no part in this transaction whatsoever. At that time, Cleveland Trust was merely depository and fiscal agent for the fiduciary and had no right at law or in ethics to prepare and file this pleading. In the answer filed to interrogatories herein by Cleveland Trust, it states it had been engaged as agent for the fiduciary in the McCambridge estate in connection with the administration and that it was more feasible for Cleveland Trust to furnish its own counsel in the Society case with information in the McCambridge estate in support of its theory in the Ferris and McCambridge interventions in the Society case.

Coming now to consider the position which the Cleveland Trust took in the Society case. Without consulting the Probate Court or the distributees in the estate, it engaged special counsel to intervene in the Society case, and having been rejected in its position, it filed an appeal, now pending in the Court of Appeals. The reason given by Cleveland Trust is that it had broad powers to preserve the assets of the estate and to bring into the estate any money or property due at the time of the death of the decedent or thereafter.'

It is common knowledge and practice by trust companies and their counsel, that, notwithstanding the terms of the will, in an unusual situation, the Probate Court is consulted for guidance and advice. The Cleveland Trust has frequently done this in the past and very often when the Probate Court suggests that full powers are given under a will, the Cleveland Trust and others similarly situated will retort to this suggestion, that the corporate fiduciary wishes to be very careful not to do anything that might be in the least bit questionable. In these instances, the Probate Court looks to the wishes and desires of the distributees in the estate and in most instances makes formal advisory decision in the matter. As previously cited, no opinion was sought from the Probate Court and no advice or consent secured from the heirs.

Cleveland Trust surely realized that the intervention as [601]*601fiduciary in tbe Society case would be suspect. Wbat net profit from the litigation would enure to this estate? While the Cleveland Trust and its special counsel say that they expected all fees to be paid out of the surplus in the Society case and that conclusion was arrived at because the intervention was in the nature of a class suit. By what authority does an executor of an estate undertake to bring an action for the benefit of others? If, by any stretch of legal imagination this theory was tenable, then why did it not determine that its position was rare and unusual and the Probate Court should be consulted for direction and advice. At that time there was already intervention on behalf of the class similarly situated which was adequately represented by able counsel.

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Related

Meinhard v. Salmon
164 N.E. 545 (New York Court of Appeals, 1928)
Manchester v. Cleveland Trust Co.
114 N.E.2d 242 (Ohio Court of Appeals, 1953)

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Bluebook (online)
182 N.E.2d 78, 88 Ohio Law. Abs. 597, 19 Ohio Op. 2d 428, 1962 Ohio Misc. LEXIS 278, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-estate-of-ferris-ohprobctcuyahog-1962.