State v. Clarke

55 N.W.2d 888, 262 Wis. 594, 1952 Wisc. LEXIS 249
CourtWisconsin Supreme Court
DecidedDecember 2, 1952
StatusPublished
Cited by2 cases

This text of 55 N.W.2d 888 (State v. Clarke) is published on Counsel Stack Legal Research, covering Wisconsin Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State v. Clarke, 55 N.W.2d 888, 262 Wis. 594, 1952 Wisc. LEXIS 249 (Wis. 1952).

Opinion

Per Curiam.

The defendant, Raymond Newman Clarke, is fifty-five years old, is married and has two sons, age fifteen and seventeen years. Upon his admission to the bar in 1919 he engaged in the practice of law with his father until 1936 when the latter suffered a stroke which rendered him mentally and physically incompetent until he died in 1943.

It is clear from the evidence that defendant and his father maintained a very close personal and professional relationship and that defendant was deeply grieved and distraught during his father’s illness and after his death. Defendant admittedly drank excessively during that period and neglected his practice. The infractions complained of occurred during that time.

In April of 1935, defendant was appointed as trustee of a trust created by the will of Mary Ellis Killian. Assets of the trust amounted to $37,473.39, including $12,000 in federal and municipal bonds. The trust provided that the income should be paid to decedent’s husband during his lifetime and, at his death, after payment of approximately one half of the trust funds to specific legatees, the remainder should be distributed to four infant beneficiaries upon their respectively attaining the age of twenty-one years, provided they had, prior thereto, taken certain religious instruction.

[596]*596The husband died in 1936 and defendant converted some of the bonds into cash, from which he disbursed approximately $22,000, leaving some $17,000 to be distributed to the minor beneficiaries as they reached twenty-one.

No annual accounts were filed by the defendant until an accounting was required by the court in March, 1943. In an account filed May 5, 1943, it was shown that all the bonds had been sold. It also listed two mortgages, one executed by Robert and Pearl Keller for $4,000, and the other by Fred and Anna Sommerfeld for $3,000.

These mortgages had been placed in the account under the following circumstances: Defendant kept no separate account for the Killian trust but intermingled the funds with his own, and he drew against the account until a shortage of some $7,000 in the trust funds was created. During this same period of time defendant was coexecutor, with Frank J. Meyer, of the will of Joseph G. Meyer. The inventory of the Meyer estate filed in 1938 disclosed assets of almost $400,000 in stocks, bonds, and mortgages, including the Keller and Sommerfeld mortgages. By 1943 all of the Meyer estate had been paid out with the exception of some $36,000 of assets which were not readily salable. Up to that time defendant had been allowed $8,000 attorney’s fees and he had drawn checks to himself totaling $11,000, but a final determination of fees had not been made. Since the executors desired to reduce some of the assets to cash, defendant secured the assignment of the two mortgages to himself as trustee of the Killian trust.

Defendant claimed that he was entitled to additional fees in the Meyer estate, but that Judge HanseN’s illness prevented authorization of the payment of such fees. (It is true that during this time the county judge was incapacitated.) He therefore took it upon himself to assign the mortgages to the Killian trust and thus balance his account in that trust, [597]*597considering the transfer as advance or earned fees which eventually would be allowed him in the Meyer estate.

When defendant filed his account in the Killian trust on May 5, 1943, it was not disclosed to the court that he had converted trust funds to his own use and replaced them by the transfer of the two mortgages. The court approved the account and made an allowance of $700 trustee’s and attorney’s fees on a petition stating that the estate had been enhanced in value $2,000 through defendant’s handling of the funds, an obvious misstatement of the facts.

Thereafter the mortgages were listed in the Killian trust until 1945 when it appears that the Keller mortgage was paid. The proceeds were invested in securities and included in the Killian accounts. Although no accounts were filed in the Meyer estate during the time that these mortgages appeared in the Killian trust, it does appear that interest was collected by Frank Meyer and entered as receipts in the Meyer estate. Interest listed in the Killian trust accounts, defendant testified, were charged against himself.

On a hearing held before Judge Pattison in July of 1950, it was determined that the Sommerfeld mortgage belonged to the Killian estate and defendant paid the Meyer estate $3,000 for it. Later he paid the Killian estate $3,000 for it, and when it was paid up he owned it personally.

In 1951 the last of the minor beneficiaries in the Killian estate became twenty-one. It is conceded that all were paid the amounts to which they were entitled, and the estate was closed in August of 1951.

The three beneficiaries of the Meyer estate involved here were children of the decedent, — Frank J. Meyer, defendant’s coexecutor, Mary M. Bradley, and Mathilda Allen. The hearing before Judge Pattison was brought on by order to show cause based upon the application of one or both of the sisters seeking an accounting and resignation of the executors. Mrs. Bradley and her attorney, Harvey Kaiser, [598]*598were appointed administrators with the will annexed on April 20, 1950.

On May 18, 1950, defendant filed a purported final account as executor of the estate, an account which was erroneous in many respects. The beneficiaries, being dissatisfied with such accounting, demanded an audit and asserted claims against the executors in excess of $90,000.

An auditor was appointed by the court and a partial audit made, from which it appeared that most of the claims against defendant were unfounded. It was apparent, however, that a complete accounting would require a long time and great expense, and Judge Pattison suggested that the parties get together - and agree upon a settlement. A settlement of $39,000 was reached and the bonding company paid two-thirds of that figure, $13,000 to Mrs. Bradley and $13,000 to Mrs. Allen, accepting notes from Frank Meyer and the defendant for that amount.

After the settlement was made it appeared that at least two items totaling $6,800 were erroneously included in the $39,000. In his report the referee states:

“The question, can fairly be asked: Was there actually a $39,000 shortage? As above stated, two items have already reduced this figure. It is possible that a complete audit might have reduced the amount still more, if not completely liquidated this amount.”

It is, however, established by the evidence that defendant converted funds of the Meyer estate to his own use. The inventory included a mortgage by Hokanson-Thompson, Inc., to the decedent appraised at $20,000, but there is testimony to the effect that it was not worth more than $13,000 or $14,000. The mortgagor quitclaimed the property directly to Frank Meyer and his sisters. In order to dispose of the real estate more profitably defendant acquired the mortgage on an adjoining lot for the three beneficiaries for [599]*599$2,300. Thereafter the entire property was sold for $28,000. After deduction of various expenses, .defendant received $24,887.91 for the sale and placed it in his personal account. He deducted $95-07 from the share of each beneficiary as part payment of his commission, leaving $8,200 payable to each.

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Related

State v. Roggensack
119 N.W.2d 412 (Wisconsin Supreme Court, 1963)

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Bluebook (online)
55 N.W.2d 888, 262 Wis. 594, 1952 Wisc. LEXIS 249, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-v-clarke-wis-1952.