Bank of Seneca v. Morrison
| Decision Date | 25 June 1918 |
| Parties | BANK OF SENECA and LAWRENCE COUNTY BANK, Respondents, v. ANNA M. MORRISON, Individually, ANNA M. MORRISON, as Administratrix of the Estate of DAVID B. MORRISON, Deceased, N. P. ROOD, SENECA TRIPOLI COMPANY, Appellants |
| Court | Missouri Court of Appeals |
Appeal from Newton County Circuit Court.--Hon. Charles L. Henson Judge.
REVERSED.
Judgment reversed.
A. W Thurman for appellants.
George Hubbert and O. L. Cravens for respondents.
Action in equity to recover of and from the defendants $ 4,000 alleged to have been diverted from the estate of David B. Morrison, deceased. Judgment below went in favor of plaintiffs and against defendants with special direction that defendants pay to the defendant, Anna M. Morrison as administratrix of her husband's estate the sum of said judgment with interest. After unsuccessful motions for a new trial and in arrest, defendants appealed.
David B. Morrison died intestate January 26, 1916, in Newton county, Missouri. Defendant Anna M. Morrison is the widow, and administratrix of the estate; defendant, Rood, is the son-in-law of Mr. and Mrs. Morrison; defendant, Seneca Tripoli Company, is a corporation.
August 17, 1915, David B. Morrison entered into a contract with one H. T. Hornsby whereby Morrison agreed to purchase one hundred twenty acres of land in Ottaway county, Oklahoma, upon which was a tripoli mine and a mill or mining plant. The written agreement to purchase provided that "in consideration of the keeping of this agreement and the further payments hereinafter stated the party of the first part (Hornsby) does hereby give and grant unto the party of the second part (Morrison) the exclusive right and option to purchase all of the right, title, and interest" in said premises. Previous to the reduction of contract to writing Morrison had paid $ 1000, and on the date of the execution thereof paid $ 500, and agreed to pay $ 1000 on September 10th, and $ 1500, October 1, 1915. After providing for the payments mentioned the contract further provided that if Morrison made the payments above mentioned then Hornsby agreed to make a deed for the additional consideration of $ 8000, one-half payable in six months from October 1, 1915, and one-half in twelve months. The $ 8000 was to be secured by mortgage on the property. The contract further provided that "if the party of the second part fails to keep any of the terms and conditions of this contract then the party of the first shall be entitled to the possession of said premises and shall have the right to reenter and take possession thereof, and at the time of the taking possession of said property, the party of the first part shall be entitled to retain and keep all payments made at the time as liquidated damages or rental for the use of said property."
Morrison made the payments due September 10th and October 1, 1915, making a total of $ 4000 paid. The record is not clear just when the payments due September 10th and October 1st were paid, but Morrison had no deed to the property when he died. February 5, 1916, defendant, Anna M. Morrison, was appointed administratrix. The estate was hopelessly insolvent, and there were, therefore, no funds with which to pay the balance due on the contract. In this situation a family conference was held, the result of which was that defendant, Rood, entered into a declaration of trust with the widow and heirs to the effect that he would pay the balance on the contract, and put the mine on a going basis; and if the venture was successful, he would reimburse himself for the $ 8000 and whatever amount he put into the project, and thereafter the profits would go to the creditors until they were all paid, and then the property would be turned over to the widow and heirs, one-third to the widow and the balance equally to the heirs.
The plan agreed upon at the family conference was communicated to Hornsby, and he declined to make a deed to Rood unless the probate court would order the release and relinquishment of Morrison's agreement to purchase as provided for in section 144, Revised Statutes 1909. The administratrix on March 3, 1916, filed in the probate court of Newton county a petition, setting up the terms and conditions of the Morrison-Hornsby contract and the burdens imposed by it, stating that there were no funds in the estate to carry out the terms of said contract, and prayed for an order of relinquishment. The probate court took up the matter, and, after hearing the evidence, ordered that the contract be relinquished. Thereafter the widow and heirs quit-claimed to Hornsby, which quit-claim was intended as a relinquishment under the order of the probate court, and is so styled by both sides. The statute, however, provides that the executor or administrator shall execute the relinquishment.
March 25th after said relinquishment Rood paid the $ 8000 balance, and Hornsby executed a deed conveying the property to Rood. Rood organized the defendant corporation, Seneca Tripoli Company, and conveyed to it by bill of sale the mining equipment situate on the premises, and by separate instrument conveyed the land. On the same day that Rood conveyed to the Seneca Tripoli Company, he executed the declaration of trust above referred to. This declaration recited the order of relinquishment, and that Hornsby had conveyed said property to Rood, and that Rood had paid the $ 8000, and had organized the Seneca Tripoli Company; and that he held all the stock of said corporation except six shares; and also the provision as to final disposition as above stated.
Thereafter, but at the same term of the probate court at which the original order of relinquishment was made, plaintiff, Bank of Seneca, filed in the probate court a petition praying that the order of relinquishment be set aside upon certain alleged grounds, the substance of which are that such relinquishment was detrimental to the interests of the estate, and was based upon insufficient evidence, and that improper influence was exercised upon the administratrix to induce her to make application for an order of relinquishment, and that there was no notice thereof to the creditors, and no report to the court of the relinquishment, and no approved or confirmation of the relinquishment, and that for these reasons the order was void.
A hearing was had on the application to set aside the order of relinquishment, and the court made an order somewhat ambiguous in that it is difficult to determine whether the probate court set the order aside or merely set the matter down for final hearing. But the view we take of the validity of the order of relinquishment, it is not necessary to determine this latter question.
No further proceedings or hearing, however, were had in the probate court, and no further steps were taken until January 18, 1917, when the cause now here was commenced in the circuit court. In the meantime Rood continued to operate the tripoli mine, and up to the time of the trial of this case below had invested therein $ 27,000 in addition to the $ 8000 paid in the beginning. At the time of the trial the plant was not on a paying basis, but bid fair to be successful.
Under the above conditions plaintiffs seek on behalf of themselves and other creditors to compel defendants to pay the estate $ 4000, the amount that was paid on the property by Morrison in his lifetime.
Defendants filed separate demurrers, and pleas to the jurisdiction of the circuit court, but these were overruled. Defendant, Mrs. Morrison answered separately renewing her plea to the jurisdiction and pleaded the insolvency of the estate, and the impossibility to redeem the property; and that the property because of its condition had no sale value above the $ 8000 against it, and was not an asset to the estate. Defendant, Rood, answered renewing his plea to the jurisdiction and denying any desire on his part to personally profit by the transaction in taking over the property, and that at the time he took over the property that it was a non-going concern and was worth not over $ 8000, and that he had put into the business about $ 30,000 in addition to the $ 8000 initial payment; and that prior to the bringing of this suit plaintiffs had been advised of and given copies of all contracts and agreements executed in connection with said property. Defendant, Seneca Tripoli Company, answered by general denial and a plea to the jurisdiction. It might be stated here that it was disclosed at the trial of this cause that plaintiff, Lawrence County Bank, has been paid in full by Mrs. Morrison individually as she was on the paper to that bank. So in fact that plaintiff has no interest here.
There are two propositions for determination as we view this record: (1) Has the circuit court original jurisdiction to hear a cause of this character? (2) Do the facts support the judgment rendered?
Defendants throughout contended that the circuit court has no original jurisdiction to determine a cause of this character. The sole purpose of plaintiffs' suit is to require an accounting for the value of Morrison's interest in the Hornsby contract. Plaintiffs challenge the validity of the order of relinquishment of the probate court in substance on three grounds: (1) That no notice was given to the creditors of the intention to make application for such order; (2) that there was no report made by the administratrix to the probate court of the relinquishment and the terms and conditions thereof; (3) that the probate court did not approve and confirm the so called relinquishment. Plaintiffs, of necessity, must overcome the obstacle of the relinquishment if it be treated as such...
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