Pengelly v. Thomas

This is an appeal on questions of law from a judgment rendered in the Probate Court of Franklin county, Ohio, on August 22, 1945. The action was a statutory one brought by a widow to open up the administration of her husband's estate, to set aside the confirmation of the final account therein, to give her an opportunity to file exceptions to the account, to require the defendant to account for the assets of the estate, to impress a trust thereon for the benefit of the widow and other heirs, and to have an administrator de bonis non appointed. The final account referred to was confirmed on October 2, 1929, and this action was instituted on August 4, 1937, because of the "fraudulent administration" of the estate.

No bill of exceptions was filed with this appeal and the plaintiff is relying solely upon error in the court's conclusions of law, a motion for a separate finding of facts and conclusions of law having been allowed. The finding of facts discloses that the plaintiff, Emma Pengelly, and Joseph Pengelly were married in the city of London, England, on September 16, 1893. Those parties and their three children lived together in England until November 5, 1907, when Joseph Pengelly deserted his wife and family and migrated to South America, where he assumed the name of Arthur Joseph Goddard, which name he continued to use for the rest of his life. On November 4, 1910, he "married" the defendant herein with whom he lived until his death on December 27, 1927.

He went into business at Columbus, Ohio, with money loaned to him by the mother of the defendant and then later the defendant came into a small inheritance which she put into the business, which was a going concern at the time of his death.

As Arthur Joseph Goddard he left a will which was duly admitted to probate on January 3, 1928. By the terms of the will the decedent named as his "wife," Cora I. Goddard (Thomas), the defendant herein, and designated her as executrix, who qualified and performed her duties as such. She elected to take under the will as the widow of Arthur J. Goddard, deceased, and received the widow's allowance as authorized by Ohio law. In his will decedent devised and bequeathed all his property to the defendant absolutely in fee simple, naming her as his wife. The defendant, either as an individual or as executrix, had no knowledge whatever that the decedent had ever been married before and knew nothing whatsoever of such marriage until sometime in July 1932 which was 34 months after the confirmation of the final account. The court found that the property administered in the Probate Court under the last will of Arthur J. Goddard was accumulated after his "marriage" to the defendant and was so accumulated without any knowledge whatsoever on her part that he was not her husband. The action seeks to vacate the final account confirmed by the Probate Court on October 2, 1929, on the alleged ground that the defendant knowingly perpetrated a fraud on the court.

The first assignment of error is that the court erred in sustaining a demurrer to the amended petition for failure to allege scienter in connection with the fraud, and for mistake and manifest error therein pleaded. The petition failed to allege that the defendant knowingly perpetrated a fraud, so a demurrer was filed, which was sustained. The plaintiff elected to plead further in accordance with the ruling on the demurrer. This assignment of error cannot be considered by this court for two reasons: First, it is not the judgment upon which this appeal is predicated; and, second, since the plaintiff elected to plead further, no judgment was entered against her in the entry sustaining the demurrer.

The second assignment of error is that the court erred in finding (No. 22) as a matter of law "that there was no tendency to deceive any person, and that there was no person in existence within the knowledge of Cora I. Goddard whom she could have deceived." We are of the opinion that such finding is not only a finding of fact but it also contains a conclusion of law which was wrongfully made. The defendant's repeated representations to the court in connection with the administration of decedent's estate that she was the decedent's widow not only had a tendency to deceive the judge of the Probate Court, whose existence was within defendant's knowledge, but did actually deceive him, because it was in reliance upon these false representations on her part that the court confirmed her account as executrix of decedent's estate, giving her the assets to the injury of the plaintiff, the lawful widow. The defendant was acting in a fiduciary capacity requiring the exercise of the highest degree of good faith toward the court, and it would be inequitable to permit her to profit by any false representations however innocently made due to mistake, inadvertence or error on her part.

The third assignment of error is that the court erred as a matter of law in the conclusion (No. 2) that "should we set aside the confirmation of the account and permit the lawful wife in England, or her estate, to receive a wife's interest as given by the law * * * we would unjustly enrich her estate." With this theory of the trial court we are not in accord. The laws of this state grant to the widow of the deceased a certain interest in his estate and which if legal cannot be unjust. It is true the record shows that the deceased accumulated his fortune while separated from the plaintiff and while living with the defendant who no doubt assisted him to some extent, but while the deceased was doing this, the plaintiff, probably, had the burden of supporting the family which he had deserted and which support was his obligation. Under this theory of the trial court, if carried to its logical conclusion, it would have availed the plaintiff nothing to have appeared in open court during the administration of this estate and presented her widow's claim, for the reason, as the trial court said in its judgment entry, "should we set aside the confirmation of the account and permit the lawful wife in England, or her estate, to recover a wife's interest as given by the law, it is our opinion that we would unjustly enrich her or her estate." That conclusion is not in accordance with the principles of equity and is contrary to law.

The fourth assignment of error is that the court erred as a matter of law in concluding (No. 3) "that the Supreme Court of Ohio has held an actual fraud must be pleaded where the allegation is perpetration of fraud on the court."

We are of the opinion that the power of the court to vacate or modify a judgment is not limited to a showing that the judgment was procured by fraud, collusion and misrepresentation, but sufficient cause for vacation or modification exists if there is a showing that the rights of interested parties are prejudicially affected by the judgment and if there was inadvertently a withholding from the court of matters which should have been properly before it, but for which withholding the judgment would not have been rendered. State, ex rel. Hussey, v. Hemmert, 34 Ohio Law Abs., 348, 37 N.E.2d 668. That fraud as a ground for vacating a judgment may be either actual or constructive has been held in numerous Ohio cases as elsewhere.

In Rote v. Stratton, 2 N.P., 27, 3 O.D. (N.P.), 156, the court said:

"* * * constructive fraud, by one standing in a fiduciary and confidential relation to the person affected, will avoid the settlement of any final account of a trustee, executor or administrator induced thereby. Any such final settlement may be attacked in a court of equity in an independent action, upon a complaint that the final settlement was obtained by constructive fraud, or fraud in fact."

In McAfee v. Phillips, 25 Ohio St. 374, the court held:

"The settlement of an account of an executor or administrator, by the Probate Court, is conclusive, as against parties with actual notice of the settlement, of all matters set out and specified therein, and as to such matters, the party rendering the account cannot be required to account a second time, unless the same is impeached for fraud or manifest error." (Emphasis ours.)

In Griffith v. Godey, 113 U.S. 89, 93, 28 L. Ed., 934,5 S. Ct., 383, Judge Field, who delivered the opinion of the court, said:

"It is well established that a settlement of an administrator's account, by the decree of a Probate Court, does not conclude as to property accidentally or fraudulently withheld from the account. If the property be omitted by mistake, or be subsequently discovered, a court of equity may exercise its jurisdiction in the premises, and take such action as justice to the heirs of the deceased or to the creditors of the estate may require, even if the Probate Court might, in such case, open its decree and administer upon the omitted property." (Emphasis ours.)

In Kuehner v. Johnson, 33 Ohio Law Abs., 401, 34 N.E.2d 996, this Court of Appeals, Judge Barnes writing the opinion, said:

"Constructive fraud may exist where there is no intent to do a wrong, but the act in contemplation of law is a wrong which makes the contract voidable at the instance of the other contracting party."

A case very similar to the case at bar is In re Estate ofShive, 65 Ohio App. 167, 29 N.E.2d 565, where it was held that a representation by a husband's administrator that the husband left no surviving spouse, when, in fact, his wife lived for seven months after his death, was a misstatement of fact, sufficient to constitute a fraud on the Probate Court within the meaning of the statute authorizing the Probate Court to reopen the decedent's estate so as to permit the administrator of the estate of the wife to obtain a widow's exemption and allowance as part of the wife's estate.

The defendant contends that actual fraud must be pleaded and proven before the Probate Court can reopen a final account. She cites Woodward v. Curtis, 19 C.C., 15, 10 C.D., 400, and Crawford v. Zeigler, 84 Ohio St. 224, 95 N.E. 743.

The syllabus in the Crawford case is:

"After the expiration of the eight months allowed by Section 6187, Revised Statutes, for filing exceptions when the account is settled in the absence of a person interested and without actual notice to him, the judgment of a Probate Court settling the final account of an executor or an administrator becomes absolute and conclusive and cannot be attacked except for fraud of the prevailing party."

We have examined that case and find that the question of constructive fraud was not raised. Either actual fraud had been perpetrated or there was no fraud at all. In discussing the case, the court did say: "The judgment of the Probate Court imports absolute verity and can only be avoided by proof of actual fraud."

We are of the opinion that the words, "actual fraud," were used because such fraud was the only kind of fraud the court had under consideration, and such words were not used for the purpose of distinguishing actual fraud from constructive fraud. However, should we be wrong in our conclusion, we feel that the weight of authority in Ohio is against the holdings of those cases that actual fraud must be pleaded and proven.

We have considered and passed upon the question of constructive fraud as the basis for the relief sought. We recognize that the trial court entertained and sustained a demurrer to the petition which was based on constructive fraud, and that, thereafter, if the issue had been restricted to the pleadings it might be said that constructive fraud was not involved. However, it becomes apparent from an examination of the findings of fact and conclusions of law that the court and counsel by common consent did consider and present the issue of constructive fraud. In this situation we are of opinion that the appeal is controlled by the principle announced in Younger Farmer Co. v. Halliday, 107 Ohio St. 431, 140 N.E. 340, and particularly by the second paragraph of the syllabus:

"2. Where a case is tried upon a given theory, and evidence is introduced pro and con upon such theory without objection, it is too late after trial and judgment to raise the question for the first time whether the pleadings warrant such a theory."

The defendant also contends that the Probate Court had no jurisdiction of the subject matter of this action, and even if it did its power to vacate the judgment confirming the final account was controlled by the old Probate Code and not by the new. This is based on the fact that the account was confirmed 27 months before the new Probate Code became effective. The defendant contends also that, if the new Code did apply, it is unconstitutional. It is conceded that prior to the adoption of the new Probate Code on January 1, 1932, the Probate Court had no jurisdiction to vacate this order.

However, the Probate Code of 1932 contains Section 10501-17, General Code, which reads as follows:

"The Probate Court shall have the same power as the Common Pleas Court to vacate or modify its orders or judgments."

That section was relied upon by this court in Abicht, Exr., v.O'Donnell, 52 Ohio App. 513, 3 N.E.2d 993, in which case Judge Barnes wrote the opinion holding that the Probate Court has jurisdiction to vacate its orders. The syllabus of that case reads as follows:

"A Probate Court can, by virtue of Section 10501-17, General Code, vacate or modify its orders and judgments the same as a Common Pleas Court, and as its jurisdiction in that respect is not limited either by the Constitution or legislative enactment to statutory grounds only, such jurisdiction includes equitable grounds as well."

Judge Barnes in the opinion in that case very clearly points out the added jurisdiction of the Probate Court by virtue of such section of the General Code, but counsel for the defendant contend that the Abicht case is authority only for a case arising under the 1932 Probate Code, and that to apply the statute to this case, where the order confirming the account was made long before the effective date of the 1932 Probate Code, would be running counter to Section 26, General Code, and to the Constitution. However, it must be borne in mind that Section 10501-17, General Code, is purely remedial and as such is not affected by Section 26, General Code. SeeSmith v. New York Central Rd. Co., 122 Ohio St. 45,170 N.E. 637, which cites the second paragraph of the syllabus in Elder v.Shoffstall, 90 Ohio St. 265, 107 N.E. 539, which reads as follows:

"2. This amended section relates to the remedy only and applies to all actions commenced in the common pleas courts of this state on and after the 14th day of May, 1913, regardless of the time when the cause of action arose."

The amended section referred to in the above paragraph of the syllabus provided that in all civil actions a jury shall render a verdict upon the concurrence of three-fourths or more of its members, whereas the former rule required a unanimous verdict.

As to the constitutional question raised by counsel for the defendant, we find ample authority to support our view that to grant the relief prayed for in this proceeding, based on Section 10501-17, General Code, would violate no provision of the Constitution. A late authoritative case, where the constitutionality of an amendment to the statutes concerning remedial rights was questioned, is that of Smith v. New YorkCentral Rd. Co., supra, the first paragraph of the syllabus of which reads as follows:

"1. A statute which relates exclusively to remedial rights is not within the purview of the constitutional inhibition against the legislative enactment of retroactive laws."

We refer, also, to the case of Hatch, Exrx., v. Tipton,131 Ohio St. 364, 2 N.E.2d 875, wherein the constitutionality of Section 10510-10, General Code, was attacked by cotenants of the real estate sought to be sold by the executrix under the authority of such section, a part of the new Probate Code. The court, in holding that the Probate Court in the exercise of the added jurisdiction conferred upon it by the section was not violating the constitutional rights of the cotenants of the real estate, said in its opinion:

"Remedial rights may be modified, altered or entirely extinguished by legislative enactment even though they be retroactive in character and operation.

"Defendants' contentions are based on the assumption that their right to statutory partition is a basic and vested property right. However, there is no property in remedial rights. The contention being based upon a false premise, the reasoning is necessarily fallacious and the conclusion erroneous.

"In the enactment of the statute in question the General Assembly did not exceed its constitutional power, nor does the statute destroy vested rights."

Section 10510-10, General Code, increased the jurisdiction of the Probate Court to such an extent that it could force a sale of the whole interests of the cotenants in the real estate which was owned by them before the enactment of such section of the Code, whereas before its enactment the Court of Common Pleas was the only tribunal which had the jurisdiction to grant such relief. It has been generally recognized that the Common Pleas Court had jurisdiction to grant relief against fraud where there was no other relief available. The relief sought by plaintiff could have been obtained in the Common Pleas Court before the enactment of Section 10501-17, General Code. Therefore, this is not a case where the Legislature provided the plaintiff with a remedy where none existed before.

See, also, In re Estate of Chambers, 30 Ohio Law Abs., 420, 36 N.E.2d 175.

For the foregoing reasons we hold that Section 10501-17, General Code, effective January 1, 1932, is determinative and grants jurisdiction to the Probate Court in this matter.

The defendant contends further that the action was not brought within the time limit for the commencement of such actions. The amended petition states the time when the plaintiff first discovered the alleged fraud, and as her action was commenced within four years after the discovery of the fraud, the action was seasonably brought. See Section 11224, General Code.

For the foregoing reasons the judgment is reversed and the cause ordered remanded for further proceedings.

Judgment reversed.

HORNBECK, P.J., and WISEMAN, J., concur.