Miller v. Henderson
| Decision Date | 07 July 1934 |
| Docket Number | 31590. |
| Citation | 33 P.2d 1098,140 Kan. 46 |
| Parties | MILLER v. HENDERSON. [*] |
| Court | Kansas Supreme Court |
Rehearing Denied Sept. 24, 1934.
Syllabus by the Court.
"Fiduciary relation" does not depend on technical relation created by or defined in law, but exists in cases where special confidence has been reposed in one who, in equity, is bound to act in good faith and with due regard to interests of one reposing confidence.
Evidence sustained finding that fiduciary relation existed between deceased contenant's widow and surviving cotenant entitling widow to obtain restoration of her rights in premises which surviving cotenant purchased at sale for payment of federal income tax assessment.
1. A fiduciary relation may exist in cases where there had been a special confidence reposed in one who in equity and good conscience is bound to act in good faith and with due regard to the interests of the one reposing the confidence.
2. The record examined, and held that a fiduciary relation existed between plaintiffs and defendant, and that the order of the trial court granting relief to the plaintiffs was correct.
Appeal from District Court, Sedgwick County, Division No. 2; Robert L. NeSmith, Judge.
Action by Mayme Miller, executrix of the will of T. E. Miller deceased, and Mayme Miller, individually and as sole devisee of T. E. Miller, deceased, against J. L. Henderson, Jr. Judgment for plaintiff, and defendant appeals.
H. W Hart, Glenn Porter, Enos E. Hook, Edw. H. Jamison, and Getto McDonald, all of Wichita, for appellant.
Robert C. Foulston, George Siefkin, Sidney L. Foulston, Lester L Morris, George B. Powers, Carl T. Smith, and C. H. Morris, all of Wichita, for appellee.
This was an action to recover specific real estate, or the value thereof, growing out of an alleged abuse of a confidential relation.
Plaintiff brought the action in a triple capacity, as executrix of her deceased husband's will, individually, and as sole devisee under the will.
The petition on which the action was tried, among other things, alleged: That T. E. Miller died testate on March 14, 1927, owning a one-half interest in an oil and gas lease on described real estate on which there were four producing oil wells, and the necessary equipment to operate the same, and that at said time the defendant Henderson owned the other undivided one-half and that Miller and Henderson were jointly engaged as cotenants and mining partners in producing oil from said leasehold estate. That the will of decedent provided: "I now own, jointly with J. L. Henderson, Jr., certain oil and gas leases, oil producing property, equipment used in connection therewith, and in the event of my death prior to the time that such business matters are closed up and the property disposed of, it is my desire and will that said J. L. Henderson, Jr., shall take over and have full management and control of all of said jointly owned property, and with the approval and consent of the Executrix of this will, shall have the power to sell and dispose of all or any part of said property; that he shall manage and operate the same and sell and dispose of said property, with the consent of said Executrix, in such manner and at such times as he may deem for the best interest of himself and of my estate, and that he shall account for and pay over to said Executrix the proceeds of the operation and sale of said property from time to time as the same accrue."
That said will was admitted to probate and defendant Henderson from that time to October 10, 1928, operated said leasehold property and accounted to plaintiff as executrix for her share, having full knowledge of the terms of said will and acting in the nature of a trustee for the benefit of the plaintiff. That plaintiff is a woman unskilled in business or in oil and gas matters, and relied upon defendant Henderson to handle the joint properties, and that in all matters set forth she relied upon, and had full confidence in, the acts and actions of defendant Henderson. That on October 10, 1928, the Miller interest in said lease was levied upon and sold by the United States for payment of an assessment for income taxes, and that defendant Henderson, in violation of his trust, bid in said property and caused a conveyance thereof to be made to the defendant Holden who was alleged to be a partner of defendant Henderson. That Henderson paid to the United States for said property a sum less than $1,320. That plaintiff was present when the sale was held and desired to protect said property, but was informed by Henderson that she could not purchase by giving a check, but would have to have actual cash, and, relying upon, and having full confidence in, Henderson, she did not bid, but permitted defendant Henderson to bid, believing a reconveyance would be made to her. That at said time the property had a fair and reasonable market value of $25,000, and, had it not been for the action of defendants, she would have bid in the property and protected the same. That since the sale defendants have refused to recognize her rights in and to the property, and claim they own the property to the exclusionof any rights of the plaintiff therein. That on October 9, 1929, she tendered Henderson $1,320 and demanded a reconveyance, which was refused, and she made an offer to tender into court the above or any other sum the court should require to reimburse defendants. A second cause of action was directed to a recovery of subsequent profits. The prayer was for reconveyance of a one-half interest, subject to payment of amounts due to defendants, or in lieu thereof for the value thereof alleged to be $25,000, and for an accounting.
We need not notice defendant Holden's answer, for no judgment was rendered against him, and he is not a party to this appeal.
Defendant Henderson's answer admitted certain parts of the petition as to Miller's death, and the ownership of the lease, but denied any fiduciary relationship toward Miller or the plaintiffs, denied that he ever was a partner of Miller, or of Holden, or that he and Holden own or hold any interest in the lease as partners. He also set up the sale by the United States and his purchase thereat for $1,100; that he did not buy for himself but for defendant Holden, and that on December 3, 1928, he assigned to Holden the interest so purchased by him; that neither he nor Holden were in any wise interested in the federal income tax assessed against Miller, and had no part in and did not procure the collector of internal revenue to buy or sell the leasehold interest which was sold at public auction to the highest bidder; that said collector advertised said property for sale as personal property, and so sold the same; that plaintiffs were present at the sale and made no objection, never brought any action to set the sale aside; that it was valid and binding; that plaintiffs are guilty of laches in commencing their action; that the sale was held October 10, 1928, and the action commenced October 8, 1930; and that the reasonable value of the property at the time the same was sold was approximately the amount for which it was sold.
The trial court made findings of fact, which need not be set out in full, but are summarized as follows: The lease in question was originally acquired by Miller, who conveyed a half interest to Henderson; they drilled five wells in 1922, four of which were producers. Miller and Henderson operated the lease until Miller's death, and Henderson and plaintiffs operated it thereafter until October 10, 1928. In 1926 Miller was badly injured and died six months later. During his disability, Henderson consulted with the plaintiff concerning the property, and continued such consultation and advice after Miller's death.
"Mrs. Miller relied upon and had full confidence in the honesty, integrity and ability of the said defendant, J. L. Henderson, Jr., and relied upon and followed his advice and suggestions in her transactions relating to the lease in question."
That the Miller interest was sold by the United States for satisfaction of unpaid income tax. That Mrs. Miller attended the sale and had a conversation with defendant Henderson and Mr. Moll, assistant internal revenue collector, who...
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