Schutt v. Campbell

• Decision Date: 08 July 1916
• Docket Number: 20,095
• Citation: 98 Kan. 518,159 P. 21
• Parties: LOUISA PICKENS and JOHANNA SCHUTT, Appellees, v. M. T. CAMPBELL, revived in the name of DONALD A. CAMPBELL, as Administrator with the Will Annexed, etc., et al., Appellants
• Court: Kansas Supreme Court

159 P. 21

98 Kan. 518

LOUISA PICKENS and JOHANNA SCHUTT, Appellees, v. M. T. CAMPBELL, revived in the name of DONALD A. CAMPBELL, as Administrator with the Will Annexed, etc., et al., Appellants

No. 20,095

Supreme Court of Kansas

July 8, 1916

Decided July, 1916.

Appeal from Shawnee district court, division No. 2; GEORGE H WHITCOMB, judge.

Affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

1. EXECUTORS AND ADMINISTRATORS--Action to Set Aside Final Settlement--Fraudulent Concealment--Accounting. The heirs of an intestate may maintain in the district court an action to set aside an order of the probate court approving an administrator's final account because it was procured by the use of a release obtained from them by intentionally false representations concerning facts which affected the value of the rights they thereby surrendered, and to have an accounting with respect to the administration.

2. SAME--Fraud--Limitation of Actions. Such an action is based on fraud, and the statute of limitations applicable is that relating to actions for relief on that ground, running from the time of discovery.

3. NOTICE--Constructive Knowledge--Record Title. Constructive knowledge of the falsity of a statement that real estate, the record title to which stood in an intestate at the time of his death, had not been sold by him, is not as a matter of law to be implied on the theory that it could have been discovered through inquiry from the purchasers.

4. PLEADINGS--Demurrer--Petition--Fraud. In this state in an action for relief on the ground of fraud, brought more than two years after its alleged perpetration, the petition to be good against a demurrer need not set out the manner of its discovery.

J. B. Larimer, Z. T. Hazen, and R. H. Gaw, all of Topeka, for the appellants.

D. R. Hite, of Topeka, for the appellees.

OPINION

MASON, J.

Ferdinand Fensky, a resident of California, died intestate and without issue, August 7, 1903. By the laws of that state his heirs were his wife, who was entitled to half his property, five sisters, two brothers and a nephew, who were each entitled to one-sixteenth of it. The widow was appointed administratrix by a California court. M. T. Campbell was appointed administrator in Kansas. He filed an inventory showing something over $ 20,000 of personal property in his hands. He paid $ 1000 to each of the collateral heirs named and received from them writings releasing all claims against the estate in favor of the widow. These releases were filed in the probate court, together with a receipt from the widow for the remaining assets shown by the inventory, and in June, 1905, an order was made closing the estate. On May 15, 1914, two of the intestate's sisters brought an action against the administrator and his bondsmen to have the settlement set aside for fraud, and for an accounting of the assets with which he was chargeable. The administrator has since died and his representative has been substituted. A demurrer to the petition was overruled, and the defendants appeal.

In addition to the facts already stated the petition makes these allegations: Fensky had at one time owned various tracts of real estate in Kansas, including what is known as Fensky's Addition to Topeka, the record title to which stood in his name at his death, but which in fact he had sold, taking notes and contracts for the deferred payments, and holding executed deeds for delivery upon their payment. These notes, contracts and deeds, after the death of Fensky, were sent by the widow to the Kansas administrator, who inventoried none of them, but accounted for them to her. He induced the collateral heirs to execute the releases referred to by falsely representing to them that the Kansas real estate had not been sold and that the entire personal estate left by Fensky amounted to about $ 20,000. Other notes than those inventoried came into the hands of Campbell as a part of the estate and were by him collected, the proceeds being paid to the widow. The plaintiffs never knew of the existence of the contracts of sale or the uninventored notes until after July, 1912.

1. The defendants maintain that the order of settlement has the force of a judgment and is not open to attack by the method here pursued. The allegation, however, is that the settlement was procured without an actual accounting as to the claims of these plaintiffs, by the use of a release of all demands against the estate (including that in California as well as that in Kansas), which had been obtained by intentionally false statements concerning facts which affected its value particularly by the representation that the Kansas real estate had not been sold by Fensky, in which case the entire title would of course have vested in his widow upon his death. A fraud so accomplished we regard as extrinsic to the issue determined by the probate court and therefore capable of forming a basis for setting aside its order. (See Plaster Co. v. Blue Rapids Township, 81 Kan. 730, 106 P. 1079; Note, 106 Am. St. Rep. 640-642, 645-647.) In the United States district court for the southern district of California these plaintiffs brought an action for an accounting, founded on the same facts, against the successors in interest of Fensky's widow, who had died in the meantime. A motion to dismiss it was sustained. A copy of a memorandum opinion, which appears not to have been published, shows that the court concluded that the fraud complained of was not of such a character as to warrant setting aside the probate court orders, because it was intrinsic with respect to the matter determined, inasmuch as the probate court presumably passed on all the things it would have had to consider if the releases had not been executed, including the extent and value of the estate, excepting that it was not required to decide the exact proportion to which the plaintiffs were entitled. The allegations in the two cases may not have been precisely the same. Here it would appear that the use of the releases, together with the receipt of the widow and domiciliary administratrix, made it unnecessary to make any decision concerning the disposal of the assets with which the ancillary administrator was chargeable. Various Kansas cases support the view that the order of the probate court is open to attack on the ground of the kind of fraud alleged, and that an equitable action in the district court is an appropriate proceeding for the purpose. (Klemp v. Winter, 23 Kan. 699; Gafford, Guardian, v. Dickinson, Adm'r, 37 Kan. 287, 15 P. 175; Carter v. Christie, 57 Kan. 492, 46 P. 964.) The joinder of the bondsmen as defendants is proper. (Fincke v. Bundrick, 72 Kan. 182, 83 P. 403.) The defendants urge that this is a collateral attack on the judgment, because other relief is sought than its vacation, and quote in support of the...