Cochran v. Davis

• Decision Date: 06 October 1931
• Docket Number: Case Number: 19816
• Citation: 6 P.2d 685,154 Okla. 103,1931 OK 581
• Parties: COCHRAN v. DAVIS.
• Court: Oklahoma Supreme Court

1931 OK 581

6 P.2d 685

154 Okla. 103

COCHRAN v. DAVIS.

Case Number: 19816

Supreme Court of Oklahoma

Decided: October 6, 1931

Syllabus

¶0 1. Guardian and Ward--Guardian Sale of Real Estate--Statutory Provisions Mandatory--Invalidity of Exchange for Other Lands.

The authority of a guardian to sell and convey the real estate of his ward rests entirely upon the statutes. Such real estate cannot be sold or conveyed by the guardian except for the purposes and upon the terms and conditions prescribed by the statutes. A sale of the ward's real estate can only be made for money, all cash or part cash and balance in installments, and a conveyance thereof in exchange for other lands is unauthorized.

2. Same--Purported Guardian Sale and Reinvestment of Proceeds Held in Effect Exchange of Properties and Fraud on Estate.

Where the face of the record in the county court purports to show a sale of the real estate of a ward by his guardian and reinvestment of part of the proceeds of such sale in other real estate, such sale being confirmed by the court and a deed executed and delivered by the guardian to the purchaser and such guardian directed and authorized by the court to reinvest part of the proceeds of such sale in such other real estate and a deed to such other real estate is executed and delivered conveying such real estate to the ward, such order having been made after confirmation of the sale, but payment of the purchase price for the ward's land not having been made prior to the agreement and order as to the investment, the guardian then having in his possession only the personal check of the purchaser not credited to his account until after the order for investment, such transactions are in effect an exchange of properties, and constitute a constructive fraud upon the estate of the ward, regardless of the good faith of the parties.

3. Same--Action Against Grantee of Land by Ward After Majority--Amount of Recovery Where Land Conveyed to Third Parties.

In such a case, if the grantee in the guardian's deed has conveyed the ward's land to third parties, in an action by the ward after majority against the grantee in the guardian's deed, the ward is entitled to recover the value of the real estate conveyed to said grantee at the time of the exchange, less what may remain as part of his estate at majority of any money paid to the guardian (which in this case was $ 500) and less any of the net income from the property deeded to the ward remaining in his estate at his majority.

Appeal from District Court, Love County; John B. Ogden, Judge.

Action for damages by ward at majority, Vaughn Cochran, against J. K. Davis, guardian's grantee on exchange of ward's real estate. Judgment for defendant, and plaintiff appeals. Reversed.

Sigler & Jackson, for plaintiff in error.

Keller & Cameron, for defendant in error.

SWINDALL, J.

¶1 This action was brought by the plaintiff on reaching majority to recover the value of land purported to have been sold for cash at guardian's sale but alleged in the petition to have been exchanged by an agreement under which the guardian executed the deed upon payment of $ 500 of the confirmed purchase price and the execution of a conveyance of real estate taken at an agreed valuation of $ 2,600. Prior to the arrival of the minor at majority the grantee, the defendant, had conveyed the real estate, and the minor brought suit on the theory that he was entitled to the value of the property at the date of the alleged fraudulent conveyance made by the guardian.

¶2 Unfortunately the guardian died before the trial, and a real estate man who participated to some extent in the transactions died before the trial, and there was no witness with any appreciable knowledge of the transactions capable of testifying except the defendant. However, there was documentary evidence that in our opinion was decisive of the controversy.

¶3 The evidence shows that on July 14, 1913, an order of sale was made in the guardianship proceedings, authorizing a private sale of the minor's real estate for cash. On August 16, 1913, an order was made confirming a reported sale made August 4, 1913, to the defendant, J. K. Davis, for $ 3,100 cash.

¶4 The guardian's deed was dated August 21, 1913, and was filed for record August 22, 1913, at 3 o'clock p. m. On August 22nd a petition was filed by the guardian reciting that he had on hand $ 3,100 as proceeds of sale and praying for leave to invest it in certain real estate described in the petition, which the petition alleged could be purchased for $ 2,600. An order was made not reciting its date, but reciting that it was made the day the petition was filed, and bearing a file mark of the same day, August 22, 1913, in which it was recited that the judge had examined the real estate described; and the order authorized that it be purchased from the defendant, J. K. Davis, and that the guardian obtain a warranty deed of conveyance. The deed was introduced and bears date of August 22, 1913, but it was not filed for record until October 6, 1913, over a week after the last entry in the books of the bank upon which the purchaser and the guardian had drawn the checks that were involved in the transactions.

¶5 The alleged payment was in each case made by check, the purchaser at the guardian's sale having given his check for the $ 3,100, and the guardian having given his check for $ 2,600 for the alleged investment. The defendant testified that he deposited his check with the county judge on the day he made his bid, or about that time, and he professed ignorance of what later happened to it. He testified to having offered to deposit the money and having been told by the county judge that he had investigated his standing and that his check would be all right. The guardian's bank account appears in evidence and it shows that the $ 3,100 check was not credited to the account of the guardian until August 23, 1913, and there was shown charged against the guardian's account on the same day, August 23, 1913, a $ 2,600 check of the guardian in favor of the defendant. Prior to the deposit of the $ 3,100 check the guardian had no account in the bank as guardian. The $ 2,600 check was introduced in evidence and it bore the date of August 22, 1913, the day on which the order granting leave to make the investment was made and on which the guardian's deed was filed for record at three o'clock in the afternoon. While the $ 2,600 check given to the defendant by the guardian was credited to the defendant's account August 23, 1913, the $ 3,100 was not charged against the defendant's account on the day it was credited to the account of the guardian. On that day, August 23, 1913, the account of the defendant showed a credit of only $ 69.55, and on the next secular day, August 25, 1913, after crediting the $ 2,600 check and deducting checks charged against the account, the balance was $ 2,607.85. On the morning of August 26, 1913, the account showed a credit of $ 2,606.85, which included this $ 2,600 credit, and on that day the $ 3,100 check was charged against his account. The president of the bank testified that the bank would at any time have honored the defendant's check for $ 3,100 regardless of the state of his account, and the defendant testified that he had arranged with the bank to honor the check.

(1) The plaintiff based his contention partly upon the case of Perkins v. Middleton, 66 Okla. 1, 166 P. 1104, in which it was held that even though a sale for cash was confirmed and an order was made permitting an investment of part of the funds alleged to have been received in payment of the purchase price, notwithstanding the fact that the sale proceedings were regular on their face and the court also passed upon the advisability of such an investment of proceeds, if the record was made under an agreement that the purchaser was not to pay the purchase price in full but that the real estate of the ward would be conveyed for the real estate purported to be purchased under the investment order, such proceedings, though regular on their face, constitute a constructive fraud upon the estate of the ward. In that case there were sales to two parties for cash, which were confirmed. The bidders then defaulted, and the defendants agreed with the guardian that they would take the allotments sold at the price bid, if the guardian would purchase a hotel property. The bids amounted to $ 3,050, and the hotel property was taken in at $ 2,200, the balance being paid partly to the guardian and partly on costs and fees. The defendants deeded the hotel property to the wards, and the guardian executed a deed to the bidders, who quitclaimed to the defendants. In the opinion, after quoting sections 6553 and 6554, Rev. Laws 1910, now sections 1466 and 1467, C. O. S. 1921, and then quoting sections 6555, 6556, and 6569, Rev. Laws 1910, same as sections 1468, 1469, and 1482, C. O. S. 1921, all of which were in effect at the time of the sale in the case we have under consideration, the court said:

"These last-quoted sections are relied upon by defendants as authorizing the transaction which took place in the instant case. We think, however, that they afford no authority for the exchange by the guardian, with or without the consent of the county court, of the property of the ward for other property, and that, construing all of our statutes governing the administration of estates of wards by guardians, no authority can be found for the sale of the ward's property for anything but money. Section 6567, first quoted above, seems to be mandatory, and requires all sales to be made for cash unless made upon terms or deferred payments. Our statutes relative to the investment of funds of the ward, whether arising from sales of the ward's property or otherwise, contemplate that the money to be invested shall be in the hands of the guardian at the time such investment is made. It seems to us that there is ample reason why this should be the law. If the

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