Cooper v. Burchett

• Decision Date: 06 May 1938
• Docket Number: 8116.
• Citation: 279 N.W. 598,66 S.D. 162
• Parties: COOPER et al. v. BURCHETT et al.
• Court: South Dakota Supreme Court

279 N.W. 598

66 S.D. 162

COOPER et al. v. BURCHETT et al.

No. 8116.

Supreme Court of South Dakota

May 6, 1938

Appeal from Circuit Court, Lawrence County; James McNenny, Judge.

Action by Otto P. Cooper and Harold M. Cooper, as executors of the estate of Miles M. Cooper, deceased, against W. R. Burchett as administrator of the estate of Barbara V. Storey deceased, and others, to set aside the sale of realty by named defendant to his wife. From an adverse judgment plaintiffs appeal.

Reversed.

John T Milek, of Sturgis, for appellants.

Francis J. Parker, of Deadwood, for respondents.

RUDOLPH Judge.

The defendant W. R. Burchett was appointed and qualified as administrator of the estate of Barbara V. Storey, deceased, on the 23d day of July, 1931. Among the assets of the estate was certain real property located in Lawrence county. Certain claims against the estate were allowed, and thereafter the administrator petitioned the county court to sell the real property for the purpose of paying claims against the estate. An order authorizing the sale was made by the county court, and thereafter an appeal was taken to the circuit court of Lawrence county, and the circuit court in effect affirmed the order of the county court authorizing the administrator to sell the real property belonging to the estate at private sale. Purporting to act under this order, the administrator sold the real property to the defendant Ellanore I. Burchett, his wife. This action is brought by certain heirs of the said Barbara V. Storey to set aside the sale of the real property by this administrator to his wife. No rights of innocent third persons are involved.

Section 3462, R.C.1919, in part, provides as follows: "An action to set aside the sale may be instituted and maintained at any time within three years from the discovery of the fraud or other grounds upon which the action is based." The above-quoted section of our Code refers specifically to sales made by administrators under an order of the county court. The present action was commenced within the time allowed by statute, and we are of the opinion it is maintainable under this statute. This statute does not extend the time of appeal from a decree of the county court, or create a remedy not recognized as a ground of equitable interference prior to its enactment. Kranz v. Tavis, 49 N.D. 553, 192 N.W. 176. However, the present action, in so far as here material, is one based on constructive fraud, a generally recognized subject of equitable jurisdiction. Pomeroy, Equity Jurisprudence, 4th Ed., § IV--Constructive Fraud. It should, perhaps, be pointed out that this is a proceeding directly attacking the sale, and is not a collateral attack similar to the attacks made in the case of Blackman v. Mulhall, 19 S.D. 534, 104 N.W. 250, or Equitable Life Assurance Society v. Lunning, 64 S.D. 168, 265 N.W. 876.

The question presented is whether an administrator of an estate may lawfully sell real property belonging to the estate to his wife. Section 3454, R.C.1919, provides as follows: "No executor or administrator may, directly or indirectly, purchase any property of the estate he represents, nor may he be interested in any sale." The specific question presented is whether an administrator might be said to be interested in a sale made to his wife, within the meaning of section 3454. The clear purpose and object of the enactment of this provision of our Code was to deny to a designing administrator one opportunity, at least, of plundering or exploiting the trust which he represents. However, we do not believe that it was intended to make sales in violation of this statute absolutely void, but simply voidable at the election of interested parties when an action might be maintained under the provisions of section 3462, R.C.1919. See Annotation 111 A.L.R. 1362.

Oklahoma has a statute similar to our section 3454; commenting thereon the Oklahoma court in a well-considered opinion in the case of Burton v. Compton, 50 Okl. 365, 150 P. 1080, 1081, said:

"The first proposition is before this court for the first time. Yet it is an old question, and has been passed upon repeatedly. And as far as we know, Indiana stands alone in upholding such deeds. In 1781, long before there was any statute upon the subject, Lord Chancellor Thurlow of England in Fox v. Mackreth, 2 Leading Cases in Equity (White and Tudor) 722, held: 'That trustees expose themselves to great peril in allowing their own relatives to intervene in any matter connected

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