Harrison. v. Miller, (No. 9301)

• Decision Date: 30 June 1942
• Docket Number: (No. 9301)
• Citation: 124 W.Va. 550
• Parties: Cephler Harrison et al. v. S. R. Miller, Exec, etc.
• Court: West Virginia Supreme Court

124 W.Va. 550

Cephler Harrison et al.

v.S. R. Miller, Exec, etc.

(No. 9301)

Supreme Court of Appeals of West Virginia.

Submitted May 12, 1942.

Decided June 30, 1942.

1. Executors and Administrators

A personal representative of an estate, who is also a creditor thereof, and who purchases at a non-judicial sale real estate belonging to the estate for himself individually, will be regarded in equity as constructive trustee thereof for those beneficially entitled thereto, though the sale is made by a third person.

2. Election of Remedies

The doctrine of election of remedies is applicable only when there are two or more inconsistent remedies available to a litigant at the time of election, and such litigant has knowledge of facts giving rise to a duty to elect.

3. Laches

"Laches is a delay in the assertion of a known right which works to the disadvantage of another, or such delay as will warrant the presumption that the party has waived his right." Bank of Marlinton v. McLaughlin, 121 W. Va. 41, Pt. 2, Syl., 17 S. E. (2d) 213.

4. Trusts

A constructive trustee of real estate who places improvements thereupon with his individual funds, and who at the time thereof is chargeable with knowledge of the facts that others are beneficially entitled to such land, is not entitled to charge the land with the money expended for such improvements.

Appeal from Circuit Court, Jackson County.

Suit by Cephler Harrison and others against S. R. Miller, in his individual capacity, as executor of the last will and testament of Fannie Harrison, deceased, and as guardian of Bessie Harrison Fisher, Hazel Harrison Owens, and Kermit Harrison, for purpose of setting aside an alleged sale of realty to defendant in his individual ca pacity, or, in the alternative, to require defendant as executor to account for proceeds of sale thereof. From decree granting second alternative prayer, the plaintiffs appeal, and the defendant assigns cross-error.

Reversed and remanded.

M. O. Litz and John L. Gillespie, for appellants. W. French Boggess, for appellee.

Riley, Judge:

This suit, involving a tract of land containing approximately one hundred and sixty-four acres in Ripley District, Jackson County, of which Fannie Harrison died seised, was instituted in the circuit court of said county by plaintiffs (Cephler, Gay and Kermit Harrison, Bessie Harrison Fisher, and Hazel Harrison Owens), children of decedent, against S. R. Miller in his individual capacity, as executor of the last will and testament of Fannie Harrison, deceased, and as guardian of Bessie Harrison Fisher, Hazel Harrison Owens and Kermit Harrison, for the purpose of setting aside an alleged pretended sale of the real estate to defendant in his individual capacity, or, in the alternative, that as executor aforesaid, he be required to account for the proceeds of sale thereof. The trial chancellor's decree granted the second alternative prayer, which decree plaintiffs seek to reverse. Defendant assigns cross-error.

Fannie Harrison died testate March 20, 1925, and under the terms of her last will and testament devised the real estate involved in this controversy to plaintiffs. The will provided in part as follows:

"It is my desire and request that my executor use his best efforts to keep in tact the farm aforesaid in accordance with the stipulations hereinbefore set out, and that he renew, if possible, the notes now held by brothers wife Emma Miller, which are evidenced by lien or deed of trust against said farm aforesaid, and with the exception of this contingency as to the collection of the notes against said farm, I do direct that said farm beheld in tact by by said executor in accordance with the foregoing stipulations until my son Kermit attains the age of twenty-one years,

(Kermit, the youngest son, was born in 1915.) The will nominated defendant, brother of decedent, as executor, and he qualified and acted as such. Defendant also was appointed guardian for three of the plaintiffs, who were infants at the time of their mother's death. At the demise of Fannie Harrison, the land was encumbered with a deed of trust to secure the payment of a note in the amount of approximately nine hundred dollars owned by Emma Miller, defendant's sister-in-law. A short time before her death Fannie Harrison requested defendant, her brother, to "take up this deed of trust" which he agreed to do; and shortly after she died, defendant "took the note over" for which he paid "$900 and interest to J. F. Miller and Emma Miller." According to defendant, he was told by "some few people around here" that "a deed of trust could not be turned over like a note", and he then requested Frank Miller, husband of Emma Miller, to return his money to him. Frank Miller had already expended a portion of the money and, as defendant relates, suggested that the land be sold and promised defendant he would have the trustee in the deed of trust sell the land. The trustee was directed by Frank Miller to sell the land pursuant to the terms of the trust deed; and although the trustee says that Emma Miller was present at the time of direction, she denies any knowledge thereof and asserts positively that she did not authorize her husband to direct any sale of the property under the trust instrument.

Public sale of the real estate took place September 12, 1925 approximately six months following the death of Fannie Harrison. Several persons bid for the property, and the highest bid of $2,450.00, offered by defendant, was accepted. He explained, "I came here with no intention of buying the land never thought of such a thing but came here to bring it a real value for them children, that is why I bid on that land," and again when asked why he bid as much as he did, he responded, "To try to help the heirs, because they was my blood kin." Mrs. Grace Casto and W. C. Harrison, aunt and uncle, respectively, of plaintiffs, testified as to their ability and willingness to pay the indebtedness had they known of the intended sale, and there is no evidence of any attempt on defendant's part to advise them thereof.

A large portion of the testimony relates to the value of the farm, and the estimated worth thereof varies from two thousand dollars to ten thousand dollars. Likewise, the evidence is conflicting as to whether this land was under lease for oil and gas purposes at the time of decedent's death. Defendant states positively that, "it was not under lease when I bought it", yet plaintiffs introduced an original oil and gas lease from Fannie Harrison to South Penn Oil Company, under date of July 18, 1923, and recorded in the office of the Clerk of the County Court of Jackson County, which provides for the payment of $41.00 quarterly in advance as delay rentals; and while the record also contains a certified copy of a recorded lease executed by defendant and wife to United Fuel Gas Company, dated July 28, 1926, which provided a similar quarterly delay rental, the record does not indicate any surrender of the lease to South Penn Oil Company.

Hagar Harrison, divorced husband of decedent, testified that he conveyed the land in controversy to his wife through a third person in 1923, and that he rented the farm for four or five years prior thereto, receiving $350.00 as rental for the first year, two years at an annual rent of $250.00 and "the other was grain rent." He named one Hugh Barnhart as the person who had paid him $350.00, but Barnhart denied paying any "cash rent" and insisted he paid "grain rent."

The trial chancellor was of opinion that the price paid by defendant for the farm was adequate, and we are not disposed to disturb that finding. In a written opinion, made part of the decree, the chancellor exonerated de- fendant from fraudulent conduct, concluded that defendant's fiduciary relationship to the plaintiffs destroyed the transaction in which defendant "was both seller and buyer", denied defendant's theory that he was entitled to an allowance for improvements, but was of opinion that "broad principles of equity demand that the second alternative in the bill", namely, that the proceeds of sale be decreed plaintiffs "should be adopted as the basis of" the decree which provides that "plaintiffs are entitled to recover of and from the defendant, S. R. Miller, the sum of $2700.63, with interest * * *." Plaintiffs contend that the decree is erroneous because (1) the sale was illegal in that it had not been advertised in compliance with the statute, (2) defendant is guilty of both actual and legal fraud, (3) the sale price of the property was wholly inadequate. Defendant likewise argues that the plaintiffs should be denied relief because (1) "of election of remedies and laches, both of which they are guilty" and (2) the trial court made its findings against Miller individually, "ignoring his fiduciary relationship".

Since the bill of complaint is based upon the alleged fraud of Miller, we shall consider first whether the charge is substantiated by the testimony. The opinion of the trial chancellor exonerates him of fraudulent action but condemns his purchase of the land because "he was both seller and buyer in the same transaction" and further because it is "the fiduciary relationship that destroys the transaction." The will, under which Miller was appointed executor directed him to use his best efforts "to keep in tact the farm" until the youngest child reached twentyone years of age and to "renew, if possible, the notes now held by" Emma Miller. By qualifying as executor, he assumed those duties which the law imposed upon him; and although the direction to "keep in tact the farm" must be regarded in the light of the existing indebtedness against it and therefore not absolute, nevertheless assumption of duties as executor required that defendant's conduct be consonant with the directions of the will and not in conflict therewith or with the interests of the estate or those of the beneficiaries under the will for whose benefit the directions were...