In Re Svitojus' Estate ( 1941 )

Plaintiffs are residents of Lithuania, parents and heirs at law of Joseph Svitojus, deceased. Defendant John J. Smolenski is administrator of his estate. In May, 1936, Fred P. Geib, an attorney, entered into an arrangement with the Lithuanian consul representing plaintiffs to bring suit on their behalf to recover certain claimed assets of said estate. The attorney agreed with the consul to represent the claimed heirs as attorney and try their case, the consul to provide funds for necessary disbursements not to exceed $100. For the services of himself and one other, Mr. Geib and his associate were to receive $500 if the litigation was unsuccessful; and, if successful, they were to receive 33-1/3 per cent. of the recovery over and above certain amounts. Mr. Geib brought suit to recover certain claimed assets on behalf of these heirs in the United States district court for the western district of Michigan, but was unsuccessful and the suit was dismissed. He then brought suit in circuit court for the county of Kent, in chancery, on the same or similar grounds, which suit was likewise dismissed and an appeal taken to this court from such dismissal. The appeal was decided by this court adversely to plaintiffs and the dismissal of plaintiffs' bill of complaint was affirmed. Costs in that case were allowedagainst Mr. Geib's clients. Svitojus v. Kurant, 293 Mich. 291.

While the above appeal was pending, Mr. Geib filed a petition in the probate court on behalf of his clients stating that certain expenses had been incurred in preparing the above case in the Supreme Court and asking for an order directing John J. Smolenski, as administrator of the estate of Joseph Svitojus, deceased, to pay the same amounting to $200.05 to him as attorney for said petitioners. The administrator filed objections to granting this petition, claiming lack of authority by the court, that the items of expense were not proper administrative expenses of the estate, that they could be paid only out of residue assigned to the heirs at law under an order determining heirs and assigning residue; and further claiming that continued litigation might deplete the estate whereby there might not be enough funds to pay administrative expenses. The probate court entered an order directing:

"Therefore, It is hereby ordered, that John J. Smolenski, administrator of said estate, be, and he hereby is, authorized and directed to pay forthwith to Fred P. Geib, attorney for said Juozas Svitojus and Zuzana, the total sum of two hundred and 05/100 ($200.05) dollars, to be disbursed by Fred P. Geib for the following items:

"Appeal fee $ 5.00 "Stenographer's fee, transcript, paid to W.S. Farrar 5.25 "Entry fee, Supreme Court 6.00 "American Brief Record, printing record (if paid before May 20) 124.84 "American Brief Record, printing Plaintiff's-Appellants' brief (if paid before May 25) 28.96 "Preparing copy for printer — 600 folios at five cents 30.00 -------- "Total $200.05

"CLARK E. HIGBEE, Probate Judge."

This order was appealed by the administrator and in the circuit court Mr. Geib moved to dismiss the appeal on the ground that the probate court order was not appealable, that it rested solely in the discretion of the probate judge, and that Smolenski, as administrator, had no appealable interest. The administrator filed objections to granting this motion with a supporting affidavit that there might not be enough money in the estate to pay the expenses incurred by him in litigation, to reimburse him for necessary expenses, and to pay his own fees, if allowed. The circuit court entered an order granting the motion and dismissing the appeal. The administrator, upon leave granted, has appealed to this court from said order.

Counsel for appellant claims that the order of the probate court was a final order, that it was not an order for partial distribution to heirs at law, and that the administrator has a direct appealable interest therein. Mr. Geib relies upon the claim that the probate court order is a partial distribution to the heirs at law under the provisions of 3 Comp. Laws 1929, § 15728 (Stat. Ann. § 27.2893). This statute authorizes the probate court to "assign the residue of the estate, if any, to such persons as are by law entitled to the same," when the debts, funeral charges and expenses of administration shall have been paid, or sufficient effects reserved in the hands of the administrator for the above purposes. The statute above referred to and others in this opinion were in effect when the order appealed from was made. They have now been reenacted without substantial change in Act No. 288, chap. 2, §§ 95-97, Pub. Acts 1939 (Comp. Laws Supp. 1940, §§ 16289-2 [95] — 16289-2 [97], Stat. Ann. 1940 Cum. Supp. §§ 27.3178 [165] — 27.3178 [167]) (probate code).

3 Comp. Laws 1929, § 15730 (Stat. Ann. § 27.2895), provides that no heir, devisee or legatee shall be entitled to such an order until payment of the debts and expenses shall have been made or provided for, unless he shall give a bond to secure the payment of his just share thereof and to indemnify the administrator against the same. In the order appealed from, the probate judge did not make any finding that the debts and expenses had been paid or provided for. No bond was filed as required. Neither did the order purport to assign the residue of the estate or part thereof "to such persons as are by law entitled to the same." In that connection, counsel apparently overlooks 3 Comp. Laws 1929, § 15729 (Stat. Ann. § 27.2894), which refers to the previous section authorizing an order assigning the residue of an estate, and provides:

"In such decree the court shall name the persons and the proportions or parts to which each shall be entitled; and such persons shall have the right to demand and recover their respective shares from the executor or administrator, or any other person having the same or any part thereof, after the expiration of sixty days from the date of such decree, unless an appeal shall have been taken therefrom, in which case they shall have the same right immediately upon the final termination of such appeal."

The probate court order appealed from is not an order assigning the residue, or any part of it, to heirs at law. It is an order directing the administrator to pay the attorney for the heirs a sum of money to reimburse him for expenses of litigation on behalf of the heirs, not on behalf of the estate. Mr. Geib was employed by the heirs, not by the estate, and his claim should be against the heirs, not against the estate. The estate itself does not owe Mr. Geib any money. This court, inSvitojus v. Kurant, supra, allowed costs against Mr. Geib's clients, and in favor of the estate. If the converse were true, there would be a basis for his claim for expenses against the estate. If an administrator neglects his duty to collect assets for an estate, the law affords heirs or legatees a remedy, but it will not permit them to represent the estate in the prosecution of suits. Hillman v. Schwenk, 68 Mich. 297.

This court cannot now adjudicate and determine in the present case the fact in dispute as to whether there will be any residue of this estate for final distribution to heirs at law. Before the probate court can determine heirs and order distribution of any residue, it must determine that all debts, charges and expenses of administration are paid or sufficient funds are on hand for that purpose. The order appealed from purports to dissipate a part of the funds of the estate. It is a final order to that extent, and the administrator has a direct interest therein, on the record submitted in the case at bar. Aside from any personal interest, it is the duty of an administrator to protect an estate from unlawful demands.

Counsel for plaintiffs relies upon In re Shadley's Estate,279 Mich. 156, and In re McNamara's Estate, 167 Mich. 406. In the Shadley Case, the probate court directed the executrix to pay a specific legacy to a legatee entitled to the same under the will, before the filing of her final account. No question was raised as to the sufficiency of remaining assets to pay the debts, expenses and allowances required by statute. In theMcNamara Case, the probate court entered an order determining who were the heirs and granted leave to the administrator to make a partial distribution to the heirs. This court found there had been a compliance with the statute and upheld the order for partial distribution, there being sufficient effects reserved in the hands of the administrator. The facts in these cases readily distinguish them from the case at bar.

On the record submitted, the probate court order was a final order in which the administrator has an appealable interest. The order of the circuit court dismissing the appeal is set aside and the case remanded for hearing, with costs to defendant.

SHARPE, C.J., and BUSHNELL, NORTH, WIEST, and BUTZEL, JJ., concurred with BOYLES, J. McALLISTER, J., concurred in the result.