Farquhar v. New England Trust Co.

• Decision Date: 22 November 1927
• Citation: 261 Mass. 209,158 N.E. 836
• Parties: FARQUHAR v. NEW ENGLAND TRUST CO. et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

261 Mass. 209

158 N.E. 836

FARQUHAR

v.NEW ENGLAND TRUST CO. et al.

Supreme Judicial Court of Massachusetts, Suffolk.

Nov. 22, 1927.

Report from Supreme Judicial Court, Suffolk County.

Suit in equity by Jennie H. Farquhar, by W. Edwin Ulmer, conservator of her property, against the New England Trust Company and others, for an injunction and to require return of stock owned by J. F. M. Farquhar deceased, to his estate. A single justice ordered an interlocutory decree sustaining demurrers to bill, and case was reported. Order for interlocutory decree affirmed.W. E. Ulmer, of Boston, for plaintiff.

J. P. Wright, J. L. Hall, and C. O. Pengra, all of Boston, for defendants.

RUGG, C. J.

[1] This suit in equity comes before us by report of a single justice, who ordered the entry of an interlocutory decree sustaining the demurrers. For the purposes of this decision all material allegations of the bill must be assumed to be true. The plaintiff in the widow of James F. M. Farquhar, who died in 1921 owning 1,000 of the 3,000 shares of the common stock of the R. & J. Farquhar Company, a corporation organized under the laws of this commonwealth. The New England Trust Company has been appointed by the probate court special administrator of his estate and executor of and trustee under his will. The plaintiff by that will is entitled to the income during her life of the residue of the estate, the trustee having discretionary power also to pay to her parts or the whole of the principal for her comfort, support, and pleasure. The trust company as special administrator was by decree of the probate court authorized to sell to three of the defendants 1,000 shares of this common stock for $1,000 and such sale was thereafter carried out. The object of this bill is to secure the return to the estate of those shares of stock by the purchasers, of the fair value thereof from some or all of the defendants. The allegations in support of this object in brief are that the allowance of the will of James F. M. Farquhar was held in abeyance on objection by interested parties; that pending the allowance of said will the defendants conspired to defraud said estate and the plaintiff of said 1,000 shares of stock, and pursuant to such conspiracy caused the New England Trust Company to be appointed special administrator of said estate, representing that its value was only $12,500 (a bond without sureties for $18,750 being given), although knowing that the value thereof was in excess of $100,000; that a petition was presented to the probate court by certain of the defendants, praying for a decree ordering the sale to three specified defendants of said 1,000 shares of stock for $1,000, the defendants well knowing the value thereof to be in excess of $100,000; ‘that on January 30, 1922, an order of notice was secured from said probate court’ by certain defendants ‘for publication of said petition’ in a Boston newspaper on January 31, 1922, and on February 1, 1922, returnable on February 2, 1922, and ‘By mailing postpaid (but not by registered mail) a copy of citation to all persons interested in said estate’; that at that time the plaintiffs in this suit resided in Boston, and the defendants all knew her residence, and knew that she was opposed to the sale of the stock, and did not notify her of said proposed sale, and that she ‘did not receive notice of said proposed sale, and did not know that said stock had been sold until informed by’ the conservator of the estate of the plaintiff; that one of the defendants, ‘nevertheless, made oath that he had complied with said order of court with respect to publication and notice, well knowing’ that the plaintiff had not been notified and had been kept in ignorance of said petition; that on February 2, 1922, a decree was secured from the probate court on said petition for the sale of said 1,000 shares of common stock to the three specified defendants for the sum of $1,000 and the sale was thereafter consummated. There are further allegations to the effect that fraudulent inventories of said estate were procured, showing a small appraisal, and that in the settlement of the estate there was no need for the sale of said shares of stock. There are additional allegations of definite intention on the part of the defendants, in taking these principal and other subsidiary steps, pursuant to their conspiracy, to defraud the said estate, and that by reason thereof the probate court was misled and deceived into entering said decree of sale. It is not necessary to recite these further allegations in detail. They are all in substance to the effect that by the fraud of the defendants the probate court was induced to enter the decree ordering the sale of the stock and the sale was subsequently consummated. There is no allegation that the decree of the probate court authorizing the sale of the stock for a definite price to the specified defendants has ever been revoked or in any way modified. The frame of the bill and the argument in its support rest upon the assumption that this decree stands in full force. Finally, it is alleged that ‘this bill is brought for the purpose of disclosing said fraud to this court, and securing protection from further acts of fraud’ by the defendants against said estate, and to secure appropriate remedies against the defendants and the return to said estate ‘of said 1,000 shares of common stock, or the value of said stock of which said estate has been defrauded; also the payment of damages to said estate and’ the plaintiff ‘resulting from said conspiracy and fraud.’ There are prayers for an adjudication that the defendants have conspired to and have perpetrated the several frauds alleged, for relief against the several defendants, for removal of the defendant trust company as special administrator, executor and trustee, and for general relief.

One ground of demurrer is that upon the allegations of the bill a court of equity has no jurisdiction because the suit is a collateral attack upon a decree of a probate court.

The outstanding features of the bill are allegations of a sale of definite shares of stock in a corporation belonging to the estate of the testator, which sale was specifically authorized as to price and purchasers by decree of the probate court procured by fraud practiced upon that court by the defendants, all to the loss of the estate and thereby loss to the plaintiff, the relief sought being the return of the shares of stock or the payment of damages.

The essential question is whether a court of equity will in substance vacate and declare void this decree of a probate court for the reasons alleged in the bill and already summarized.

The probate courts of this commonwealth are courts of superior and general jurisdiction. Like presumptions must be made in favor of the proceedings of those courts as are made in favor of proceedings of those courts as are made in favor of proceedings of other courts of superior and general jurisdiction (G. L. c. 215, § 2), except as to adjudications touching the fact of death as provided in G. L. c. 192, § 3. It is a general principle of practice under our jurisprudence that a decree of a probate court cannot be attacked in any collateral proceeding. It was said in Tobin v. Larkin, 187 Mass. 279, 282, 72 N. E. 985:

‘A decree of the probate court within its jurisdiction is good unless it is set aside, and it cannot be attacked collaterally. Gale v. Nickerson, 144 Mass. 415, 11 N. E. 714.Tucker v. Fisk, 154 Mass. 574, 28 N. E. 1051.Harris v. Starkey, 176 Mass. 445, 57 N. E. 698,79 Am. St. Rep. 322.McCooey v. New York, New Haven & Hartford R. Co., 182 Mass. 205, 65 N. E. 62.’

That case in its facts bears points of resemblance to the case at bar. That is the doctrine of all our decisions for many years.

In Sever v. Russell, 4 Cush. 513,50 Am. Dec. 811, the parties were not permitted to show that an executor's account was in fact fraudulent. In Waters v. Stickney, 12 Allen, 1, 3 (90 Am. Dec. 122), is found this statement:

‘Decrees of probate courts in matters of probate, within the authority conferred upon them by law, are conclusive upon the courts of common law, and cannot be reversed by writ of error or certiorari. * * * Nor can they be set aside in equity, even for fraud.’

This principle is too thoroughly settled to require further quotations from adjudicated cases. Authoritative decisions in support of it are numerous. Jenison v. Hapgood, 7 Pick. 1, 7,19 Am. Dec. 258;McClees v. Burt, 5 Metc. 198, 200;Sever v. Russell, 4 Cush. 513,50 Am. Dec. 811;Allen v. Trustees of Ashley School Fund, 102 Mass. 262;Sprague v. West, 127 Mass. 471;Foster v. Foster, 134 Mass. 120;Engstrom v. Sherburne, 137 Mass. 153, 155;Green v. Gaskill, 175 Mass. 265, 56 N. E. 560;Conners v. Cunard Steamship Co., Ltd., 204 Mass. 310, 90 N. E. 601,26 L. R. A. (N. S.) 171, 134 Am. St. Rep. 662; 17 Ann. Cas. 1051;Dallinger v. Morse, 208 Mass. 501, 94 N. E. 701, Ann. Cas. 1912A, 982;Allen v. Hunt, 213 Mass. 276, 279, 100 N. E. 552;Taylor v. Badger, 226 Mass. 258, 115 N. E. 405;Joyce v. Thompson, 229 Mass. 106, 118 N. E. 184;Woodard v. Snow, 233 Mass. 267, 124 N. E. 35, 5 A. L. R. 1381;Hanscom v. Malden & Melrose Gas Light Co., 234 Mass. 374, 125 N. E. 626;Hutchinson v. Blanchard, 247 Mass. 288, 142 N. E. 47;Fidelity & Casualty Co. of New York v. Huse & Carleton, Inc., 254 Mass. 359, 150 N. E. 230. There is nothing contrary to this great current of decisions in Wilder v. Orcutt, 257 Mass. 100, 153 N. E. 332. The general principle that the decree of a probate court cannot be attacked collaterally is there recognized and affirmed. That was a suit by a creditor of one of the defendants to reach and apply property held by the other defendant on a secret trust for the benefit of the debtor and acquired by fraud upon the probate court in the settlement of an estate in which the plaintiff was in no way interested. The creditor had no standing to seek relief in the probate...