Palmer v. Ridge

312 Mich. 258
CourtMichigan Supreme Court
DecidedOctober 8, 1945
DocketDocket No. 40, Calendar No. 42,916
StatusPublished

This text of 312 Mich. 258 (Palmer v. Ridge) is published on Counsel Stack Legal Research, covering Michigan Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Palmer v. Ridge, 312 Mich. 258 (Mich. 1945).

Opinion

Stake, C. J.

This case involves tbe question of whether or not certain attorneys’ fees and expenses incurred by Louis G. Palmer were properly chargeable against the estate of J. Hazel Gilmore Davis, deceased.

Said J. Hazel Gilmore Davis died September 23, 1932, leaving a will in which she made specific bequests to her sister, Lyda Palmer Ridge, her brother, Louis G. Palmer, and other named legatees. The will designated her husband as executor, but he declined to act, and on December 5, 1932, said Louis G. Palmer was appointed administrator with will annexed by the probate court for Wayne county. The principal assets in the estate were several parcels of real estate, which were subject to mortgages or delinquent taxes. Among the assets was the property located at 18-22% Washington street in the city of Ypsilanti, Washtenaw county. It was subject to a mortgage to the Detroit Trust Company, on which there was a balance due of $9,233.30. This mortgage together with other mortgages, had been pledged by the trust company as ■security for an issue of its series “S” participation certificates.

At the time of his appointment as administrator of the Davis estate, Palmer was acting as trustee under an inter vivos trust created by his wife for the benefit of herself and their son, John Palmer. The Davis estate ivas apparently without funds to pay the mortgage on the Ypsilanti property. Acting through one Herbert Cole, Palmer, as trustee of his wife’s trust, purchased the mortgage on this [260]*260property from the Detroit Trust Company. He paid the trust company the balance due of $9,233.30 by surrendering certain of its series “ S ” participation, certificates which he, as trustee and with trust funds, had acquired at a cost- of $6,270. The gain or profit on this transaction was $2,963.30, the difference between the balance due on the mortgage and the cost of the participation certificates. On October 5/ 1934, the trust company assigned the mortgage to Cole, and on October 6th Cole assigned it to Palmer, as trustee.

Prior to the time he purchased the mortgage, Palmer, as administrator, filed petition in probate court for authority to sell the Ypsilanti property at private sale. An order was entered August 22, 1934, authorizing him to sell it for $1,500, which represented the appraised value over and above the mortgage indebtedness. On October 18, 1934, he filed'a report stating that he had sold the property to one Minnie Gardner for $1,500, and an order was entered confirming the sale. The record shows that Palmer, as trustee, had loaned Minnie Gardner the $1,500 with which to make the purchase. As trustee, he also loaned her further sums of money with which to repair and improve the store buildings on the property. Minnie Gardner held title for about nine months and then conveyed the property to Palmer, as trustee.- He has since continued to hold title to the property and has improved it and collected the rents. In the latter part of 1935 Palmer, as administrator, filed a report in probate court covering the period from August 11,1934, to November 1,1935. In this report he showed the receipt of $1,500 from the sale of the Ypsilanti property, but he did not show the above-mentioned profit of $2,963.30 realized by him, as trustee, in purchasing the mortgage from the trust company.

[261]*261Several years later, in July, 1939, Palmer’s sister, Lyda Palmer Ridge, and certain other beneficiaries under the Davis will, filed bill of complaint in the circuit court for Washtenaw county against Palmer, individually and as trustee for his wife and son, and as administrator of the Davis estate. They alleged that by acquiring title to the Ypsilanti property as trustee, Palmer had perpetrated a fraud upon the Davis estate. They asked for an accounting and that Palmer be required to transfer the property to the estate. He answered, denying the charge of fraud and alleging in substance that his acquisition of the property as trustee was regular and proper. He denied that plaintiffs were entitled to any relief. The case was tried, and the court’s opinion determined that Palmer was not guilty of the fraud charged, but that he, as trustee, was liable to the Davis estate for the above-mentioned profit of $2,963.30. A decree was entered which provided in part:

“1. That Louis G. Palmer, as trustee for Grace S. Palmer and John C. Palmer, is liable and indebted to the estate of J. Hazel Gilmore Davis, deceased, in the sum of $2,963.30, without interest.

“2. That any and all transactions of Louis G. Palmer, as administrator of the estate of J. Hazel Gilmore Davis, deceased, or as trustee for Grace S. Palmer and John C. Palmer, or individually, with reference to (the Ypsilanti) property * * * were in each instance entered into in good faith, and were not had or made in fraud of the rights of plaintiffs to this action or in fraud of the estate of J. Hazel Gilmore Davis, deceased.

“3. That the sale of the property above described by Louis G. Palmer, as administrator * * * to Minnie Gardner, * * * and the subsequent repurchase by Louis G. Palmer, as trustee for Grace S. Palmer and John 0. Palmer, was in good [262]*262faith and for a valuable consideration and was not had or made in fraud of the rights of plaintiffs to this action./ ’

No appeal was taken from the above decree, and it stands as a final adjudication of the rights of the parties to the Ypsilanti property. The record indicates that in pursuance of. the decree, Palmer paid to himself, as administrator of the Davis estate, the sum of $2,963.30.

We now come to the principal matter in controversy in the present case. At the time Lyda Palmer Ridge and other beneficiaries began the suit in Washtenaw county, Palmer employed Detroit and Ann Arbor attorneys, who represented him throughout that litigation. He did not at that time petition for or obtain authority from the probate court to employ said attorneys. The case was tried in October, 1940, and the above-mentioned decree was entered in July, 1941. After the trial, but prior to the entry of decree, Palmer, as administrator, petitioned the probate court for authority to employ the Detroit and Ann Arbor attorneys to represent him in the Washtenaw county litigation.- In January, 1941, an order was entered authorizing him to employ said attorneys and further providing that their employment “is hereby confirmed.” After the conclusion of the suit, the attorneys rendered Palmer bills for their expenses and services in the aggregate amount of $2,972.95. He paid these bills and reported the payment in his “supplemental & amended final account” as administrator filed March 18, 1943. Lyda Palmer Ridge and other-beneficiaries under the Davis will filed objections to the allowance of Palmer’s final account, on the ground that the attorneys’ fees and expenses incurred by him in connection with the Washtenaw county suit were not properly chargeable against [263]*263the Davis estate. In March, 1943, an order was entered in prohate court allowing the final account and the above-mentioned attorney fees. Lyda Palmer Eidge and other beneficiaries appealed to the circuit court for Wayne county. In his opinion reversing the probate court and disallowing the attorneys.’ fees and expenses, the circuit judge stated in part:

“It appears that on December 7, 1935, the administrator (Palmer) filed an account in the probate court in which he sets forth as a receipt the $1,500 obtained from the sale of said property to Minnie Gardner.

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Related

Sprague v. Moore
99 N.W. 377 (Michigan Supreme Court, 1904)
Stover v. Wayne Probate Judge
189 N.W. 14 (Michigan Supreme Court, 1922)

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Bluebook (online)
312 Mich. 258, Counsel Stack Legal Research, https://law.counselstack.com/opinion/palmer-v-ridge-mich-1945.