Dillinger v. Kelley

• Decision Date: 31 October 1884
• Citation: 84 Mo. 561
• Parties: DILLINGER et al., Appellants, v. KELLEY et al.
• Court: Missouri Supreme Court

84 Mo. 561

DILLINGER et al., Appellants,

v.KELLEY et al.

Supreme Court of Missouri.

October Term, 1884.

Appeal from Clark Circuit Court.--HON. B. E. TURNER, Judge.

AFFIRMED.

Whiteside and Givens & Meryhew for appellants.

(1) An executor, administrator, or trustee, cannot purchase real estate belonging to the estate of his cestui que trust, either at public or private sale. R. S., p. 25, sec. 166; Grumley v. Webb, 44 Mo. 444; Roberts v. Mosely, 64 Mo. 507; Thornton v. Irwin, 43 Mo. 153; Harper et al. v. Mansfield et al., 58 Mo. 17; Ryden v. Jones, 9th American Decisions, 660; 4 Kent (9 Ed.) pp. 502 and 414; 1 Story's Equity Jurisprudence (12 Ed.) pp. 313 to 317, secs. 321 and 322. (2) The cestui que trust is not bound to prove, nor is the court bound to decide that the executor or trustee has made a bargain advantageous to himself, in order to set aside the sale. The rule that a trustee, or executor cannot purchase the trust property, is one of public policy independent of questions of fraud, and the trustee, or executor, cannot become the purchaser, even though the sale was at public auction, bona fide, and for a fair price. Thornton v. Irwin, 43 Mo. 153; 1 Story's Equity Jurisprudence (12 Ed.) p. 315, sec. 322; Grumley v. Webb, 44 Mo. 444; Webb v. Dietrich, 7 W. & S. 401; Rea et al. v. Copelin, 47 Mo. 76. (3) A trustee, or executor, cannot purchase, even when the land is sold at a judicial sale. 64 Mo. 507. A preponderance of the evidence shows that there was a positive agreement between plaintiffs and Kelley, the executor, that he (Kelley) would buy the land for the heirs. (4) Defendants and plaintiff, Margaret, being joint tenants, the purchase by defendants inured to the advantage of plaintiff, Margaret, a joint owner. Picot v. Page, 26 Mo. 398; Rea et al. v. Copelin, 47 Mo. 76; Weare v. Van Meter, 20 American Reports, 616; Fallon v. Chidester, 26 American Reports, 164; Sneed's Heirs et al. v. Atherton, 32 American decisions, 70.

Berkheimer & Matlock for respondents.

(1) Plaintiffs have no standing in a court of equity, as Daws Kelley was the administrator, and as such could purchase the land in a mortgage foreclosure sale and hold as against the heir. 2 Sugden on Vendors, p. 405, note n; Blood v. Haymen, 13 Met. p. 231; Johns v. Norris, 7 C. E. Green (N. J.) p. 102; Lorzems v. Bryson, 3 Binn. 59; Ward v. Smith, 3 Sandf. 592. (2) An administrator is not a trustee of the real estate of his intestate, for the heir, and as against the heir; he may purchase for himself, at a judicial sale, in foreclosure of a mortgage. See cases cited supra. (3) The administrator has nothing to do with the real estate, but it descends directly to the heir, except on an inchoate right to sell for the payment of debts. Auberdien v. Long, 23 Mo. 99; Chambers v. Wright, 40 Mo. 482. Such being the case, the administrator primarily representing the creditors of the estate, his interest, instead of being the interest of a trustee, is directly antagonistic to the heirs. In all of the cases cited by appellants, where the administrator became the purchaser, there was actual fraud proven, as it was at their own sale, under the orders of the probate court, or it was the sale of a trustee, pure and simple, which is not the case at bar. In the absence of actual fraud, a purchase by an administrator at a sale by him will not be set aside by the heirs or devisees without repayment by them of the money advanced by the administrator. 2 Sugden on Vendors (14 Ed.) 420; Yeacle v. Litchfield, 13 Allen 417; Harrington v. Brown, 5 Pick. 521; Pratt v. Thornton, 38 Me. 355; Roberts v. Moseley, 64 Mo. 507. The plaintiffs and defendants are tenants in common, and the payment of the Keith judgment, and allowed claims against the estate, inured to the benefit of all. Pricket v. Page, 26 Mo. 398; Rector v. Waugh, 17 Mo. 14; 1 Washburn on Real Property, 588.

SHERWOOD, J.

Isaac Kelley owned about one hundred and eighty acres of land, about sixty-five acres being in cultivation in Clark county, Missouri, which tract was incumbered by a debt secured by mortgage held by Benj. Keith. Kelley made a will, whereby he so devised his farm that his son, Milton, was to have the use of it, and to keep the wife of the testator, and the mother of Milton, during her natural life; to pay the taxes, also the interest due on the Keith mortgage, and keep up all necessary repairs on the farm, and after the death of the widow, the mortgage was to be satisfied, and the residue of the land was to be divided between the ten children of the testator, share and share alike. After the testator died the will was admitted to probate, and no executor having been appointed by the will, Daws Kelley administered, taking out the letters cum testamento annexo. The mortgage debt becoming due, Keith foreclosed in 1880, and at a public sale at which Milton Kelley, Daws Kelley, administrator, and Franklin Kelley, the sons of the testator, became the purchasers, being the highest bidders. It seems that Milton Kelley did not take possession of the land under the will, but kept possession, and worked the land for his mother, who was alive at the time this cause was heard. The land at the foreclosure sale brought eight hundred and fifty dollars, and after satisfying the mortgage debt, there was sufficient left to pay off several hundred dollars of claims allowed against the testator's estate, and still leave a small balance in the hands of the administrator for the use of his mother. In 1881, the administrator made final settlement of the estate.

Margaret Dillinger, the daughter of the testator, and her husband, Jacob, instituted this proceeding, charging fraud in the foreclosure sale; in the administration of the estate; that the administrator was a trustee and could not buy at such sale, and that Margaret was a tenant in common with defendants, and, therefore, they could not buy the land to her prejudice. For these reasons the plaintiffs prayed that the sale might be set aside, and the interest of Margaret decreed to her under the provisions of the will, and for general relief. As to the fraud charged, I have discovered not a trace of it in the record. The land was poor post-oak, brush land, so poor that Milton, the son, could not afford to keep the farm in repair, pay the taxes and keep down the interest on the Keith mortgage. This being the situation I will consider the effect of the administrator's joining with his brother in buying in the farm at the foreclosure sale.

I. At the time this sale occurred, the provisions of section 166, Revised Statutes, 1879, relied on by plaintiffs, were in full force. This section, which prohibits an administrator from purchasing the land of his testator, or intestate, has no sort of reference to sales other than probate sales. The question, then, arises, is there any law which forbids an administrator from buying the land of his intestate, when sold by the process of the circuit court? I see nothing in the way of the validity of such a purchase. With the real estate of his decedent the administrator has no concern or power of disposition; has no duty to perform, except in leasing the land, under the direction of the probate court; the power to recover the rents, and the possession of the land thus leased (Revised Statutes, 1879, section 129); and has, under the order of that court, the naked power to sell the land for the payment of debts. R. S. 1879, sec. 149; Aubhon v. Lory, 23 Mo. 99; Chambers v. Wright, 40 Mo. 482. Viewing the matter from this standpoint, and the attitude and relations of an administrator toward the land of his intestate, outside of the pathway of his powers and his duty, would seem to be that of a mere stranger; for it is only where power and duty, the constituent elements of a trust, towards a specific subject matter are conferred, that fiduciary character begins. In the matter of the foreclosure sale, Daws Kelley, as administrator, had, in that capacity, neither power to exert, nor duty to perform. I prove this by asking this question, which suggests at once its own negative answer: Suppose the administrator had not attended the foreclosure sale, or purchased the land sold thereat, would that have rendered him liable on his bond, as and for a breach of that bond? If it would not, then it stands to reason that, having no duty to perform regarding that land, which required his presence at the sale, that when he went there and bought the land, he did so on the footing of the merest stranger, free to buy, or free to forbear.

The case of Johns v. Norris, 7 C. E. Greene (N. J. Eq.) 102, is directly in point in favor of this position. There the administrator bought the land of his intestate under a foreclosure sale, and upon bill brought to have the purchase by the administrator declared to have been in trust for the complainants, it was held there was nothing objectionable in the purchase, Chancellor Zabriskie, observing in regard to the matter: “It is claimed that Noah Norris, as administrator, was trustee for the heirs and creditors, and, therefore, had no right to purchase any of the estate for himself, and that the other defendants had notice of this fact. Noah Norris, as administrator, was a trustee of the personal estate for the creditors and next of kin. He had no power over the real estate, nor trust as to it. He could only meddle with that by an order of the Orphan's court that he should sell it....