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In Re Estate of Kapraun

APRIL 9, 1959.

IN RE ESTATE OF FRANK F. KAPRAUN, DECEASED.


Appeal from the Circuit Court of Marshall county; the Hon. HOWARD WHITE, Judge, presiding. Affirmed.

JUSTICE CROW DELIVERED THE OPINION OF THE COURT.

This is an appeal by Karl A. Kapraun, Bertha P. Kapraun and Anna C. Kapraun from an order of the Circuit Court of Marshall County overruling certain objections to the Final Report of Philip H. Kapraun, Executor of the Will of Frank F. Kapraun, deceased. The matter was heard in the Circuit Court on an appeal and trial de novo from the County Court, where the same type of order had previously been entered.

Frank F. Kapraun died testate on April 1, 1953. Karl A., Edward W., Philip H., Bertha P., and Anna C. Kapraun, his children, all adults, were his only heirs, legatees, and devisees. His Will was admitted to probate on May 4, 1953, and a son, Philip, nominated therein, was appointed and qualified as Executor in the County Court. Attorney Robert T. Swengel acted as attorney for the executor. The deceased owned certain personal property, — cash, a bank deposit, old coins, a safe, and U.S. Bonds, — of the approximate value of $12,000, but owned no real estate. Under the Will, so far as material, the testator gave, devised, and bequeathed "all the rest, residue and remainder of my estate . . . to my executor with the power and directions to convert all of my estate into money as soon as the same can be done without injury to the value thereof. . . ." and "after my estate has been converted into money, and the cost of so converting the same has been paid, I give and bequeath all of said estate remaining to be equally divided between my five children: . . ." (naming them.)

On April 12, 1954, three of the five children, — Karl A., Bertha P. and Anna C. Kapraun, — filed a complaint in the Circuit Court of Marshall County, seeking to establish a constructive trust, and for other relief, in eighty acres of land which the testator had previously owned in his lifetime, but which he had conveyed on June 7, 1949, to his son Philip H. Kapraun and Agnes C. Kapraun, wife of Philip H. Kapraun, pursuant to a contract of January 2, 1949, the complaint, in substance, alleging, inter alia, that at the time of the contract and deed a confidential, fiduciary relationship existed between Philip H. Kapraun and his wife, and the father, Frank F. Kapraun, and that the purchase price of $250 per acre was substantially under the true market value. Philip H. Kapraun, individually, and his wife, Agnes C., and the other child of the testator, Edward W. Kapraun, and a tenant were the original defendants. Later, on the motion of the plaintiffs, Philip H. Kapraun, as Executor of the Will of Frank F. Kapraun, deceased, was made a defendant. That cause was referred to a Master in Chancery, who, after a hearing, recommended a dismissal of the suit for want of equity, and the Circuit Court entered a decree dismissing the suit for want of equity. An appeal was then taken by the plaintiffs therein to the Supreme Court, an opinion was filed on November 20, 1957, affirming the decree of the Circuit Court: Kapraun v. Kapraun (1957) 12 Ill.2d 348, and the mandate therein was filed in the Circuit Court December 10, 1957.

On May 4, 1953, the Executor, Philip H. Kapraun, had filed an inventory, which listed no real estate, but listed some cash, a bank deposit, and certain U.S. Savings Bonds, totaling about $12,000. Following the opinion of November 20, 1957 of the Supreme Court in Kapraun v. Kapraun the Executor on January 6, 1958 sent in the U.S. Savings Bonds for redemption, received a check therefor February 5th, prepared a first and final account, sent copies to the other legatees February 28th, and filed the first and final account in the County Court on March 10, 1958, wherein the Executor indicated a proposed, though not yet paid, attorney's fee of $500 to Mr. Swengel, as attorney for the Executor.

Four of the testator's five children, being all of the children except the Executor, filed written objections April 7, 1958 to this final report of the Executor, though Edward W. Kapraun did not join in the appeal from the County Court to the Circuit Court or to this Court. The objections, so far as material, are, substantially, as follows: (1) that the Executor not having filed a first and final report until March 10, 1958, more than two years from his appointment of May 4, 1953, unless good cause is shown, the Executor is liable to pay interest on the not paid out and not distributed personal estate, which property amounts to $11,995.29, at the rate of ten per cent per annum from May 4, 1955, under Ch. 3 Ill. Rev. Stats., 1957, par. 462; and (2) that Robert T. Swengel, attorney for the Executor, Philip H. Kapraun, represented the Executor in the administration of the estate, and also represented Philip H. Kapraun, individually, and as Executor, defendants in the foregoing chancery proceeding, Kapraun v. Kapraun brought by Karl A., Bertha P., and Anna C. Kapraun, seeking to establish the foregoing alleged constructive trust, and by so doing the attorney represented conflicting interests in violation of certain Canons of Professional Ethics of the Illinois State and American Bar Associations, that he was paid or expected to be paid by Philip H. Kapraun, individually, for services in the chancery proceeding, and by reason of the premises he should forfeit his claim for an allowance of $500 for fees for representing the Executor in the estate proceeding. The County Court overruled the objections, approved the account, ordered payment of costs and fees, and directed distribution. The Circuit Court order is to the same effect. In the Circuit Court there was a stipulation that Mr. Swengel was the attorney for the Executor in the estate proceedings and for Philip individually and as Executor in Kapraun v. Kapraun, that for services in Kapraun v. Kapraun he had been partly paid and expects to be fully paid by Philip individually, and copies of various parts of the files and records in Kapraun v. Kapraun were admitted in evidence as exhibits, being chiefly some of the pleadings and orders therein. The record also includes copies of the petition for probate, etc., letters, inventory, final report, objections, and orders herein of the County and Circuit Courts.

The appellants objectors, as to the one objection, cite, primarily, Section 308 of the Probate Act, Ch. 3, Ill. Rev. Stats., 1957, par. 462, which is as follows, so far as now material:

"At the expiration of a period of two years after the issuance of letters testamentary or of administration the executor or administrator shall be charged with interest at the rate of ten per cent per annum on the fair market value of all the personal estate which has come into his possession or control and has not been properly paid out or distributed except for good cause shown. The interest shall run from the period two years after the issuance of letters testamentary. . . ."

On the other objection, the appellants cite primarily Canon 6 of the Canons of Professional Ethics of the Illinois State Bar Association, revised and adopted June 4, 1938, and of the American Bar Association, adopted August 27, 1908, edition of December, 1950, which provides, so far as material:

". . . It is unprofessional to represent conflicting interests, except by express consent of all concerned given after a full disclosure of the facts. Within the meaning of this canon a lawyer represents conflicting interests when, in behalf of one client, it is his duty to contend for that which duty to another client requires him to oppose. . . ."

The facts do not appear to be in dispute. Robert T. Swengel, an attorney, represented Philip H. Kapraun, as Executor in the estate proceedings, and represented him both individually and as Executor in the cause in the Circuit Court of Kapraun v. Kapraun. At the time of filing the complaint therein Philip H. Kapraun as Executor was not made a party defendant, but later, on motion of the plaintiffs, Philip H. Kapraun as Executor was made a party defendant. He, as Executor, then filed a separate answer in effect denying that the plaintiffs were entitled to any relief. Philip H. Kapraun, individually, (and his wife, Agnes) had also filed an answer in effect denying that the plaintiffs were entitled to any relief. Mr. Swengel has been partially paid and expects to be fully paid by Philip H. Kapraun, individually, for services rendered in Kapraun v. Kapraun and the requested attorney's fee of $500 indicated in the Executor's presently pending final account is evidently solely for legal services to the Executor in the estate proceedings as such.

It is the theory of the Executor that the Circuit Court was correct in overruling the objections for the following reasons:

"1. There was no conflict of interest when the attorney for the executor in the estate proceedings also represented Philip H. Kapraun, both individually and as executor, in a certain cause in the Circuit Court of Marshall County, as well as in the appeal therefrom to the Supreme Court of the State of Illinois, so that the attorney for the executor is entitled to attorney fees for services rendered in connection with the administration of the estate.

"2. Since the appellants did not make objection in the equity proceedings when the executor continued to act, the doctrine of res judicata prevents them from raising the objection for the first time on their ...


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