Hayes v. Fry

• Decision Date: 28 November 1904
• Citation: 110 Mo. App. 20,83 S.W. 772
• Parties: HAYES v. FRY et al.
• Court: Missouri Court of Appeals

83 S.W. 772

110 Mo. App. 20

HAYES v. FRY et al.

Kansas City Court of Appeals. Missouri.

November 28, 1904.

RELEASE — WHO MAY IMPEACH.

1. Where an administrator sues on a debt as due decedent's estate, and defendant pleads a written release by decedent, the administrator cannot impeach the release by showing that it was in fraud of creditors; that being a matter available only to the creditors themselves, or those in privity with them.

Appeal from Circuit Court, Bates County; W. W. Graves, Judge.

Action by John C. Hayes, administrator of the estate of John Fry, Jr., deceased, against Albertus Fry and others. From a judgment for defendants, plaintiff appeals. Affirmed on rehearing.

W. O. Jackson and Francisco & Clark, for appellant. Bruce Barnett, for respondents.

SMITH, P. J.

This is an action which was brought by plaintiff in his capacity of administrator to recover $1,595 for work done for defendants by the former's intestate during his lifetime. Among the defenses pleaded by the answer was that to the effect that the plaintiff's intestate had executed in writing to defendants a full discharge and release for the services performed by the former for the latter. The replication was that said discharge and release pleaded in the answer was in the nature of a gift by said intestate to defendants of his property, and was without consideration and void as to the creditors of the former; that at the time of the execution of said discharge and release the said intestate was insolvent, and largely indebted to various creditors, and especially to one Egger in the sum of $1,300; and that he was without means or property of any kind, except said debt that was due to him by defendants. At the trial the court instructed the jury to the effect, if John Fry, Jr., was working for the defendants, whether under express contract or otherwise, and further finds that at the time he, the said intestate, executed the written instrument of date August 31, 1901, the said defendants were indebted to said intestate in any sum, "and you further find that at such time the said intestate was indebted to John B. Egger, and that the instrument of date August 31, 1901, was executed either for the purpose of making a gift of the indebtedness by defendants to said intestate, or for the purpose of hindering and delaying the said John B. Egger, or other creditors, in the collection of their debts, then such instrument will be insufficient as to this plaintiff as an instrument of conveyance or assignment of debt or account." The court set aside the verdict, which was for defendants, on the ground that it had erred in its action in the giving of the instruction just referred to, and it was from this order the appeal was taken.

The order of the court setting aside the verdict and awarding a new trial was in our opinion proper, and should be upheld. In McLaughlin v. McLaughlin, 16 Mo. 242, Judge Scott, in writing the opinion of the court, said: "The administrator and heirs had no right to impeach any of his (the intestate's) transactions as being fraudulent as against creditors. None but the creditors themselves and those in privity with them can avoid an instrument on the ground that it was made to defraud creditors. As a party to a fraudulent conveyance cannot allege its illegality with a view to its avoidance, so neither can his heirs and representatives, coming in as volunteers and standing as it were in his shoes." And this statement of the law, although made by Judge Scott more than 50 years ago, there has since been no departure from, so far as we have been able to discover, in this state. It is quite true that in some of the cases there are expressions whose meaning at first blush would seem obscure, or possibly ambiguous; but, when properly analyzed and understood, it will be found that none of them have modified or altered the rule as declared in McLaughlin v. McLaughlin, supra. Brown's Adm'r v. Finley, 18 Mo., loc. cit. 378; Criddle's Adm'r v. Criddle, 21 Mo. 522; George v. Williamson, 26 Mo. 190, 72 Am. Dec. 203; Merry v. Fremon, 44 Mo. 518; Jackman v. Robinson, 64 Mo., loc. cit. 292; Zoll v. Soper, 75 Mo. 460; Roan v. Winn, 93 Mo., loc. cit. 511, 4 S. W. 736; Stevenson v. Edwards, 98 Mo., loc. cit. 626, 12 S. W. 255; Thomas v. Thomas, 107 Mo., loc. cit. 464, 18 S. W. 27; Crook v. Tull, 111 Mo., loc. cit. 288, 20 S. W. 8; Heinrichs v. Woods, 7 Mo. App. 236; Rozelle v. Harmon, 29 Mo. App. 569.

According to the rulings in the adjudications just referred to, it is plain that it would not have been permitted to the intestate, had he sued on the cause of action in issue in this case during his lifetime, to question the validity and binding effect of the release and discharge pleaded by the answer, on the ground that it was made and contrived in fraud of his creditors, and therefore void, nor to the plaintiff, his representatives, standing in his shoes. The rule enunciated by the said instruction is inapplicable in a case of this kind. Accordingly the order granting the new trial must be affirmed. All concur.

ELLISON, J.

1. In my opinion the present state of the law in this state does not justify us in holding to the old rule, stated in Brown's Adm'r v. Finley, 18 Mo. 375, George v. Williamson, 26 Mo. 190, 72 Am. Dec. 203, and some other cases, that an administrator of an insolvent estate could not avoid the voluntary and fraudulent transfer of property by his intestate. The administrator under our statute is a trustee for creditors of the estate. This is manifest from the fact that his duty is to protect, collect, and preserve the estate in the interest of and for the benefit of the creditors first, and next the heirs; and, if the estate be insolvent, the heirs would have no practical interest in it, and the administrator would be merely a trustee for the creditors. He is so declared by the Supreme Court. In Stagg v. Green, 47 Mo. 500, it is said that: "The policy of our law is obvious. The executor is but a trustee. He receives nothing in his own right, but everything for the use of others." This is restated in Chandler v. Stevenson, 68 Mo. 450. "The prevailing rule now established in this court is that executors and administrators stand in the position of trustees to those interested in the estates upon which they administer." Merritt's Estate v. Merritt, 62 Mo. 150. This view of the relation of an administrator is repeated by the Supreme Court in a late opinion by Judge Burgess, wherein it is stated that he is "a trustee for the creditors and for heirs or legatees." Richardson v. Cole, 160 Mo. 372, 61 S. W. 182, 83 Am. St. Rep. 479. Under the old régimé, where the probate and administrative system was not so comprehensive and exclusive as now, it was held by many courts that the administrator could not attack his intestate's fraudulent deed or act, but that a creditor had a remedy for himself, by charging the fraudulent grantee as an executor de son tort; that is, that such grantee held property which was properly assets of the estate for liquidation of debts. But the growth of our statute and the comprehensiveness of the probate system has silently eliminated such a thing as an executor de son tort, and the rights of suitors which formerly obtained against such a personage no longer exist. Rozelle v. Harmon, 103 Mo. 339, 15 S. W. 432, 12 L. R. A. 187. The former rule, which denied the right of the administrator of an insolvent intestate to attack the grantor's transfer and allowed it to a creditor, was one of great inconvenience and might require as many suits as there were creditors. It likewise in practice resulted in great injustice; for the first creditor to attack could monopolize the whole property, if necessary to pay his claim. It was so stated and conceded in George v. Williamson, supra. But in Rozelle v. Harmon the court, after saying that the provisions of our present statute "are wholly inconsistent with the idea of executors de son tort as at common law," expressly state that the statute does not recognize "the right of one creditor to secure payment of his debt to the exclusion of others." In speaking of the scheme and object of the probate law, the Supreme Court of New York said that "it impounds his [the deceased's] estate for the benefit of his creditors, and no creditor can, by any procedure or any degree of vigilance, obtain any preference over others." Lichtenberg v. Herdtfelder, 103 N. Y. 306, 8 N. E. 526. The case of Rozelle v. Harmon is in keeping and harmony with the prior ruling in Titterington v. Hooker, 58 Mo. 593, where a creditor of an estate without personal assets and which had been settled up undertook to redress himself by suing the heirs and charging their land as assets received from the estate. But the court held that that could not be done, as it formerly might, since our statute was "designed to entirely supersede the more cumbrous machinery of the common law, and that the whole doctrine of equitable assets, marshaling assets in equity for the payment of debts, and bills for the discovery of assets and account is without application."

And so it is distinctly held in other jurisdictions that, where the system of administering estates (whether by express statute, or implied from the general exclusive comprehensiveness of the statute) does away with executors de son tort, and consequently interferes with the...