McKibben v. Diltz

• Decision Date: 09 June 1910
• Citation: 128 S.W. 1082,138 Ky. 684
• Parties: McKIBBEN v. DILTZ et al.
• Court: Kentucky Court of Appeals

128 S.W. 1082

138 Ky. 684

McKIBBEN v. DILTZ et al.

Court of Appeals of Kentucky.

June 9, 1910

Appeal from Circuit Court, Bracken County.

"To be officially reported."

Action by J. C. Diltz, executor, and others against G. H. McKibben. From a judgment for plaintiffs, defendant appeals. Affirmed.

George Doniphan and Humphrey & Humphrey, for appellant.

Worthington & Cochran, for appellees.

NUNN J.

One Watson P. Diltz died in the year 1891 a resident of Bracken county, Ky. He left three children, one son and two daughters, all of whom were married and had children. He owned about 200 acres of land situated on the Ohio river adjacent to the town of Augusta. He left a will by which he gave to his children a life estate in his property with remainder in fee to the children of each, his grandchildren who were numerous and many of them infants. He appointed his son, J. C. Diltz, and his son-in-law, W. P. Coons, as his executors. By the third clause of the will he directed his executors to sell and convey a certain small parcel of his land and apply the proceeds on his debts. This piece of land contained about 17 acres, and was sold by the executors shortly after Diltz's death. The first clause of the will is as follows: "I will that my funeral expenses be paid and my debts according to contract. For the purpose of paying my debts I will that my executors, if necessary, rent the farm I own situated just above said town of Augusta Kentucky, and same bought of James Nichols and Maranda, for that purpose; but if my creditors are not willing to wait until the money to pay them can be raised in that manner, in that event I direct and empower my executors to borrow the money to pay them, by mortgaging said farm, and then to rent said farm until the debts are paid."

Pursuant to this power to borrow and for the purpose of paying off the debts of decedent, the executors borrowed from John W. Bowman $5,000 on August 21, 1891, and executed to him a note due August 21, 1894, bearing 8 per cent. interest from date until paid. The executors executed to Bowman a mortgage on the balance of the land, about 182 acres, to secure the note. After the note fell due, Bowman brought an action in the circuit court to settle the estate of Diltz and to foreclose the mortgage. That suit was filed in May, 1896. The devisees of the testator were all made defendants. During the pendency of the action, Mrs. Coons, a daughter of the testator, died and appellant, G. H. McKibben, qualified as her administrator filed an answer as such and entered his appearance to the action. It appears that some of the devisees of the testator employed attorneys in that action for the purpose of putting in a defense of usury; that they had their answers prepared but never filed them, having entered into an agreement, which will hereinafter be referred to, not to do so, and a judgment was rendered in the month of March, 1898, directing a sale of the farm to pay the mortgage debt and two legacies of $200 each with interest, and a few small debts which had been proved against the estate in the action. The total amount of the debts and legacies, including interest and estimated costs to the date of the sale, July 9, 1898, amounted to $7,059.95. The land was adjudged to be indivisible without materially impairing its value and was ordered to be sold as a whole. Appellant made the only bid at the sale that was made, and his bid was $7,059.95, the exact amount of the debts as above set out. The property was sold to him, the sale reported to the court within a few days thereafter, which confirmed it, and ordered a deed made to appellant by the commissioner. Within a day or two, and in compliance with an agreement made previous to the purchase by McKibben, the adult devisees of Diltz and McKibben signed and executed the following writing: "Augusta, Kentucky, July, 1898. This agreement made and entered into by and between G. H. McKibben of Augusta, Bracken County, Kentucky, of the first part, and Ada D. Robbins, John W. Robbins, Lounora Robbins, Ella F. Robbins, Augusta Robbins, Eva Bauer, Kneodler Robbins, Mary L. Robbins, Addie Robbins, Joseph Robbins, J. C. Diltz, Clara L. Diltz, Jennie Mitchell, Diltz Mitchell, Mary Ella Mitchell, Edward Mitchell, Ada M. Coons, Bettie J. Coons, Louisa Coons, Samuel Boude & Lidia Boude, devisees of Watson P. Diltz deceased, late of Bracken county, Kentucky, of the second part witnesseth: That whereas G. H. McKibben has pursuant to the order of sale made and entered in equity case No. 828, Bracken circuit court, wherein John W. Bowman is plaintiff, and Watson P. Diltz's executors and others are defendants, purchased the real estate therein and hereafter described, for the sum of ___ and whereas he has had to mortgage the said premises for the full sum aforesaid, and whereas the said G. H. McKibben, while wishing fully to protect himself and to indemnify himself against all loss, damage, and expense, yet is willing to assist the said parties of the second part to repurchase said premises. Now he, the said G. H. McKibben, proposes as follows:

"(1) It is understood and agreed that this sale and purchase are absolute, and that the offers herein shall in no manner be understood or construed to create a mortgage or trust estate.

"(2) The sale being absolute, the said G. H. McKibben takes complete and absolute charge of the said premises, and all things pertaining thereto, farms, cultivates and manages the same as his best judgment dictates.

"(3) At any time within five years he offers to resell the said real estate to the parties of the second part for an amount equal to the amount for which the aforesaid mortgage is executed with interest thereon at 6 per cent. per annum, payable annually from the ___ day of ___, 1898, until paid, all taxes, insurance and all improvements, advancements and expenses whatever, including a reasonable annual allowance to said McKibben for his time, labor, trouble and attention, all of which shall, however, be subject to credit of all the rents, issues and profits, arising out of said realty, of all of which the said McKibben agrees to keep accurate account, which shall be conclusive against all parties.

"(4) Upon the acceptance and settlement on the basis set out in No. 3 the said McKibben agrees for himself, his representatives and assigns to convey the said real estate to the said parties of the second part by deed of special warranty in the proportions and manner set out in the will of the late Watson P. Diltz, probated at the July, 1891, term of the Bracken county court."

The above is all the agreement except a description of the property and the signatures of the parties. It appears that in the spring of the year 1903, and prior to the expiration of the five-year time limit mentioned in the agreement, the devisees, realizing that they would not be able to meet the balance of the claim--about $6,400--at the time specified began to look for some one who would take appellant's place, hold and conduct the farm for their benefit upon the terms stated in the aforesaid agreement, or some one who would purchase the land, pay all the claims against it, and pay the balance of the purchase price to them. It seems that they failed on the first proposition, but did find a person who agreed to give $9,000 in cash for the land, provided he could get a good title to it. He consulted a lawyer, who was one of the representatives of the Diltz devisees, and was advised that, as there were so many of the Diltz heirs under age, and who had not signed the agreement with McKibben, some of whom were still under age, a good title could not be obtained by purchase from the owners; that the safest and surest way to secure a good title was to have a friendly suit for the settlement of the estate and for a sale of the land by the master commissioner for the payment of the claims against it, and a division of the remaining proceeds after paying all debts among the devisees in the proportions fixed by the will. This fact was made known to appellant, and all the testimony shows that he apparently agreed to this, at least, his words and conduct were sufficient to lead all those in interest to believe that it was entirely agreeable with him, and that all he wanted was his money with interest and a reasonable compensation for his services, and this continued until October of that year, several months after this action was filed and the five years' limit mentioned in the agreement had expired. The first intimation that they had that he would undertake to claim the land as his own, was in the month of October, 1903, when he appeared in court by counsel and moved the court to require appellees to verify their petition and also filed a general demurrer thereto. The first positive information to appellees that appellant claimed the land because they had not repurchased it within the five years, was received by them when appellant filed his answer in the month of January, 1904, wherein he asserted such a claim. In other words, he claimed that under the agreement with the heirs he was to reconvey the land to them upon condition that they would repurchase the land from him within five years from the date of the agreement, and that they had failed to do so, therefore the land was his. Appellees claimed that by reason of an oral agreement, made prior to the sale under the Bowman judgment and the subsequent written agreement, appellant became their trustee to take charge of the farm and manage it for their benefit; that he was to take the proceeds, pay the expenses of running the farm, his claim for the purchase price, with interest, and himself for his services; that, at most, he only held a mortgage lien for the payment of the things named. The...