Hayes v. Fry

• Decision Date: 28 November 1904
• Citation: 83 S.W. 772,110 Mo.App. 20
• Parties: JOHN C. HAYES, Administrator, etc., Appellant, v. ALBERTUS FRY et al., Respondents
• Court: Kansas Court of Appeals

83 S.W. 772

110 Mo.App. 20

JOHN C. HAYES, Administrator, etc., Appellant, v. ALBERTUS FRY et al., Respondents

Court of Appeals of Missouri, Kansas City

November 28, 1904

Appeal from Bates Circuit Court.--Hon. W. W. Graves, Judge.

AFFIRMED.

Order affirmed.

W. O Jackson and Francisco & Clark for appellant.

(1) The first duty of the administrator is to collect and pay off the claims in the order in which they are classed so far as he has assets. Section 210, R. S. 1899. (2) In Missouri the creditors are bound by the acts of the administrator even where they are not parties to the action. Kennerly et al v. Shipley, 15 Mo. 640. (3) The administrator can not as a representative of the deceased, nor as the representative of the heirs, participate in setting aside a fraud of the deceased, but as the representative of the creditors, when the estate is insolvent, he not only can, but it is his duty so to do. Hugh v. Menefee, 29 Mo.App. 192; Stewart v. Kennerly, 31 Am. Dec. 482 and notes; Ewing v. Handley, 14 Penn. St. 157n; Andrew v Hinderman, 71 Wis. 148.

Bruce Barnett for respondents.

(1) The court committed no error in sustaining the motion for new trial. Error has been committed upon the trial in giving instruction numbered 3, for the reason that said instruction submitted to the jury the question as to whether or not the release made to the respondents by John Fry, Jr., was without consideration and as such void as in fraud of his creditors when that is a question, which can be raised only by the creditors of said John Fry, Jr., and not by him nor by his administrator, who stands in his shoes. Brown's Admr. v. Finley, 18 Mo. 378; McLaughlin v. McLaughlin, 16 Mo. 249; George v. Williamson, 26 Mo. 190; Cheely's Admr. v. Wells, 33 Mo. 109; Merry v. Fremon, 44 Mo. 522; Jackman v. Robinson, 64 Mo. 292; Roan v. Winn, 93 Mo. 511; Stevenson v. Edwards, 98 Mo. 626; Thomas v. Thomas, 107 Mo. 464; Crook v. Tull, 111 Mo. 288. (2) And this principle that an administrator can not attack or impeach a gift made by his intestate on the ground that such gift is void as in fraud of creditors, holds good whether the gift be one of personal property or a conveyance of real estate. Brown's Admr. v. Finley, 18 Mo. 375; Thomas v. Thomas, 107 Mo. 464, and other cases supra. (3) The fact of the insolvency of the estate does not authorize the administrator to impeach a gift made by the intestate in fraud of creditors. Brown's Admr. v. Finley, supra. (4) Even after the death of the donor of a fraudulent gift his creditors may have the gift set aside in an equitable proceeding, but the administrator represents the intestate and not the creditors, and can not attack the conveyance as in fraud of creditors. Brown's Admr. v. Finley, supra; George v. Williams, supra.

SMITH, P. J. ELLISON, J.

OPINION

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 defendant by the former's intestate during his lifetime. Amongst 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 defendant 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 defendant 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 defendant, 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 can not 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 from this statement of the law although made by Judge SCOTT more than fifty years ago, there has since been no departure, 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 Admr. v. Finley, 18 Mo. l. c. 378; Criddle's Admr. v. Criddle, 21 Mo. 522; George v. Williamson, 26 Mo. 190; Merry v. Fremon, 44 Mo. 518; Jackman v. Robinson, 64 Mo. 289, 292; Zoll v. Soper, 75 Mo. 460; Roan v. Winn, 93 Mo. 503, 4 S.W. 736; Stevenson v. Edwards, 98 Mo. 622, 12 S.W. 255; Thomas v. Thomas, 107 Mo. 459, 18 S.W. 27; Crook v. Tull, 111 Mo. 283, 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 representative 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.

SEPARATE OPINION.

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 v. Finley, 18 Mo. 375; George v. Williamson, 26 Mo. 190, 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: "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 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.] Under the old regime, 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 thing as an executor de son tort and the rights of suitors which formerly obtained against such a personage no longer exists. [Rozelle v. Harmon, 103 Mo. 339, 15 S.W. 432.] 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...